The Sixth Circuit Court of Appeals Expands an Employer’s Defenses to a Claim of Discrimination

The Sixth Circuit Court of Appeals Expands an Employer’s Defenses to a Claim of Discrimination

Gerry Davis 2016In the case of Richardson v Wal-Mart Stores, Inc., the United States Court of Appeals for the Sixth Circuit, which includes the state of Michigan, interpreted, clarified and enlarged the defendant employer’s defense to a claim of age discrimination under the Elliott-Larsen Civil Rights Act.

The Court of Appeals confirmed that the 62-year old plaintiff, Richardson, failed to offer either direct or indirect evidence that her job was terminated based on her age.  It has been her allegation that Walmart illegally terminated her job because of her age.  A former supervisor acknowledged her age, but the court recognized that the plaintiff could not establish her claim, because that supervisor was transferred to another store four months before Richardson was terminated, and that supervisor was not involved in the discharge decision.  Richardson further claimed the store manager who terminated her “exhibited a pervasive pattern of discriminatory conduct toward her,” and that this constituted direct evidence of discrimination.  While the store manager’s actions may have shown he probably did not like Richardson, none of the facts demonstrate discrimination based on age.  The Court of Appeals also recognized that Richardson failed to establish her claim based on circumstantial  evidence of discrimination because, even though she offered prima facie evidence enough to go to a jury for a fact adjudication, the defendant Walmart offered a legitimate non-discriminatory reason for her termination, alleging she engaged in unsafe work practices in violation of Walmart’s safety policies and her conduct brought her to the fourth and final steps of the company’s progressive disciplinary policy.

In accordance with law, the plaintiff argued that Walmart’s stated reasons were pretextual, that is, offered as a pretext for their real reason, which was discrimination.

Under case law and the theory of judicial precedence, where a court must follow the decisions of earlier courts regarding the same issue, a plaintiff must state enough facts to create legitimate questions of fact that support a basis of discrimination (prima facie evidence), and then it is for the trial court or a jury to decide if those assertions made by plaintiff are true.  When the plaintiff has offered evidence of discrimination, the burden of proof then shifts to the defendant to state a legitimate non-discriminatory reason justifying their actions.  If the defendant does that, the burden then shifts one more time, back to the plaintiff to prove that the defendant’s stated non-discriminatory reasons were a pretext (false reason) for the real reason, which was discrimination.

In the Richardson case, the court noted that other employees, even those younger than Richardson were disciplined and fired for similar reasons.  The Court of Appeals further stated that, even if the plaintiff could successfully dispute the disciplinary actions, “Walmart still would be entitled to summary judgment under the honest-belief rule, which prohibits a finding of pretext “if the employer can establish its reasonable reliance on the particularized facts that were before it at the time the decision was made.”  Therefore, Walmart did not have to be correct in its judgment, as long as it honestly believed the facts upon which it relied for termination were true, or the facts existed as they honestly believed them to be.

The honest-belief rule also provides that an employer is entitled to summary judgment on pretext, even if conclusion is later shown to be “mistaken, foolish, trivial or baseless.”

This is a published case, meaning it is intended to constitute legal precedent for future cases decided under similar fact scenarios.

Gerald C. Davis is a partner in our Livonia office where he concentrates his practice on corporate and business law, leveraged buy-outs, company reorganization and refinancing, analyzing investments for joint ventures, intellectual property, and drafting loan agreements. He may be reached at (734) 261-2400 or gdavis@cmda-law.com.

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