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  She claimed that her computer and FB access was revoked the next day and she was fired a week later.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.

Sixth Circuit Affirms Dismissal of Race Discrimination Claims Where Newly Hired Co-Workers Were Paid More and Had More Job Related Education and Experience

Last week, the Sixth Circuit affirmed an employer’s summary judgment on race discrimination claims challenging common pay and promotional practices. Woods v. FacilitySource LLC, No. 15-3138 (6^th Cir. 2-3-16).  The Court also clarified what constitutes a Charge of Discrimination.  In affirming dismissal of the claims, the Court found that it was not discriminatory for the employer to pay new hires – with higher and more job-related college education – more than long-time employees without a college education or with only a fine arts degree.   The Court also recognized that when an employer fails to post promotional openings for Senior Account Managers, a plaintiff need not prove that he applied for a promotion in order to challenge promotions that were given to those outside his protected class.  Nonetheless, the Court found that individuals with higher levels and/or more job-related education and prior job experience were more qualified for those promotions than the plaintiffs.  Finally, while the Court found that a plaintiff – who was the only African-American manager - identified inappropriate racial comments and racial insensitivity in the workplace, it was not severe or pervasive enough to constitute a hostile work environment.   

According to the Court’s opinion, one of the plaintiffs was the employer’s only African-American supervisor and the other plaintiff was his domestic partner who alleged that he was discriminated against because of his association with the other plaintiff.  They had been hired in 2005 at approximately $10/hour, had been promoted to the positions of Account Manager and were making approximately $42,000/year at the time that they filed their Charges.  Of the 26 other Account Managers, all but one was hired after them, 12 were hired after 2010 and most were paid significantly more than them, including 11 of the newly hired managers.   The employer defended the higher salaries paid to the other Account Managers on the basis that the market after 2010 was competitive and that they needed to increase the level of college education and prior management experience required for the positions and the starting salaries.  While the plaintiffs conceded the fairness of paying more for greater education and experience, they felt that their salaries should have been increased as well to reflect their greater seniority with the employer.   During pre-trial discovery, the employer discovered that one of the plaintiffs had made misrepresentations on his job application about having a high school diploma (which he lacked) and voluntarily leaving a job from which he was actually involuntarily terminated (when he had similarly lied on a job application).

Charge of Discrimination.  The plaintiffs sent notarized letters (signed under penalty of perjury) to the EEOC and OCRC and completed intake questionnaires, but never signed or dated official Charge of Discrimination forms.  Instead, they requested and received right-to-sue letters from the EEOC and filed suit.  The district court found that they exhausted their administrative remedies because, among other things, the EEOC treated their letters and questionnaires as Charges, but the EEOC filed an amicus brief indicating that this factor was irrelevant. The Court agreed that the EEOC’s treatment of the letters and questionnaires was irrelevant, but still found that the plaintiffs had exhausted their administrative remedies because the plaintiffs had filed Charges giving notice of their allegations and requesting the agencies to take action.

Pay Discrimination.  The employer conceded that the plaintiffs had alleged a prima facie case because they were paid less than all of their fellow Account Managers.  On appeal, the employer contended that the other Account Managers were more qualified than the plaintiffs and were paid more on account of a factor other than race.  In particular, the employer increased the starting salary for the position in 2010 to reflect increased requirements for college and job-related prior experience.  This resulted in virtually all of the new hires being paid more than most of the existing Account Managers, including plaintiffs.  The Court found this to be a non-discriminatory reason: The plaintiffs’

belief that seniority should have been given equal or greater weight than educational and experiential accomplishments does not mean that the defendants were guilty of wage discrimination simply because they viewed other criteria as more germane to their salary-determination decision.

As for the other Account Managers hired before 2010 who were also paid more than the plaintiffs, the Court found that they similarly possessed greater education (i.e., college degrees) and more relevant job experience than the plaintiffs.  One of the plaintiffs did not even have a high school degree and the other had a fine arts degree, unlike business, marketing or communications majors who had higher salaries.   In other words, the court found that a fine arts degree did not justify the same amount of salary paid to co-workers with a marketing degree or business classes:

Clearly, skills gained from such a [fine arts] degree were not as immediately transferrable to Lorenzo’s job at FacilitySource as were those from the degrees obtained and courses taken by other individuals in management and business related subjects.

Promotions.  The employer promoted a few Account Managers in to Senior Account Manager positions.  Even though the plaintiffs did not apply for these promotions, the Court found this was unnecessary in light of the employer’s failure to post the positions:

[I]n failure to promote cases a plaintiff does not have to establish that he applied for and was considered for the promotion when the employer does not notify its employees of the available promotion or does not provide a formal mechanism for expressing interest in the promotion. Instead, the company is held to a duty to consider all those who might reasonably be interested in a promotion were its availability made generally known.

Nonetheless, the plaintiffs could not prevail because one of them lacked the requisite college degree and the other was less qualified than the individuals ultimately promoted due to their more relevant college courses.

Hostile Work Environment.  The plaintiff was able to identify race-based comments and that clients were rarely introduced to him during walk-arounds unless they were also African-American or specifically requested to meet with him. “When directed toward or used to describe an African-American employee, especially the sole African-American employee in a management position, such comments and conduct must be considered both inappropriate and racially insensitive.”  However, the plaintiff never explained how this conduct was so offensive that it interfered with his work.   He was ultimately fired because of dishonesty on his job application, not because of his job performance.

 

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 be changed or 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.

Senate Passes Ledbetter Fair Pay Act of 2009

Yesterday, by a vote of 61-39, the Senate passed the Ledbetter Fair Pay Act of 2009 in order to reverse the 2007 Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, which held that the statute of limitations under Title VII begins to run when a discriminatory pay decision is announced and/or implemented is not renewed with each subsequent paycheck. (The FLSA and companion Equal Pay Act already run with each illegal paycheck). The Act was already passed by the House of Representatives earlier in January and President Obama is expected to sign it. [Editor's Note: The White House blog confirms that he expects to sign the Senate version of the Ledbetter Act. http://www.whitehouse.gov/now-comes-lilly-ledbetter/]

The Ledbetter Act provides as follows:
• Nothing in the Act “is intended to change current law treatment of when pension distributions are considered paid.”
• An unlawful discriminatory compensation practice occurs under Title VII, the Americans With Disabilities Act (“ADA”), the Rehabilitation Act of 1973, and the Age Discrimination in Employment Act (“ADEA”) “when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits or other compensation is paid, resulting in whole or in part from such a decision or other practice.
• In addition to relief provided by Title VII and 42 U.S.C. § 1981a [i.e., compensatory and punitive damages], an aggrieved person may obtain relief, including recovery of back pay for up to two years preceding the filing of the Charge of Discrimination when the unlawful employment practices that have occurred during the charge filing period are similar to or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.

Interestingly, the Act provides that it should take effect as if enacted on May 28, 2007 – the day before the Supreme Court’s 2007 Ledbetter decision -- and apply to all claims of discrimination in compensation under Title VII, the ADEA, the ADA and the Rehabilitation Act which are pending on or after that date. In that this provision would impose retroactive liability on defendants in lawsuits (which may no longer be pending) where the defendants were not otherwise liable under then-existing laws, there may be a constitutional challenge made to any retroactive application. In other words, Congress is attempting to substitute itself for the judicial branch and impose liability on Goodyear and other employers which the Supreme Court and other courts already dismissed more than 17 months ago.

Insomniacs may read the legislation in full at http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=1&vote=00014

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.