Pretextual Failure to Promote Produce Worker Is a Recipe for Disaster

HR professionals are all too familiar with the McDonnell-Douglas burden-shifting standard for establishing discrimination from circumstantial evidence. Under the standard, an employee presents a prima facie (minimally sufficient) case that he belongs to a protected class and suffered an adverse action. The employer then presents a legitimate nondiscriminatory reason for its action, and he in turn tries to prove its stated reason is merely a pretext (false excuse) for discrimination.discrimination

Each McDonnell-Douglas burden-shifting case is highly fact-specific, and—notwithstanding nearly 45 years of case law applying the standard—reasonable minds still disagree on how much evidence is required to support a finding of pretext. A recent case before the U.S. 10th Circuit Court of Appeals— which covers Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming—demonstrates how tricky such situations can be.

What’s the Big Dill?

“Mike,” who is originally from Nigeria, is a naturalized U.S. citizen who recently experienced the ambiguity of the McDonnell-Douglas standard firsthand. “Neil,” the director of distribution at Safeway’s Denver distribution center, hired Mike to work in the produce warehouse in October 2004. During his employment, Mike furthered his education, earning a second bachelor’s degree (in finance) and an MBA. At some point, apparently following a complaint of discrimination, Neil promoted him to supervisor. The performance of the produce warehouse improved under his watch.

Despite his education, work experience, and achievements on the job, Mike was never able to rise higher up the management chain. In 2012, he applied for two open manager positions. In each case, Neil hired a white male instead.

Mike filed suit in the U.S. District Court of Colorado, alleging that Safeway discriminated against him because of his race, color, and national origin when it failed to hire him for either manager position. The district court rejected his claims and awarded summary judgment (dismissal without trial) to Safeway under the McDonnell-Douglas standard.

Mike’s allegations satisfied his prima facie burden, but Safeway argued it had a legitimate reason for not hiring him. It claimed it had hired other candidates with “far greater potential for success” and “more relevant warehouse management and leadership skills,” and it was concerned about his “leadership and communication skills.” The district court concluded he hadn’t presented sufficient evidence for a jury to conclude that the company’s justifications were pretextual.

It Ain’t Over Lentil It’s Over!

Dissatisfied with the result, Mike appealed the district court’s decision to the 10th Circuit. The appeals court revisited six types of pretext evidence he had presented:

(1) Job qualifications. An employee can show pretext through evidence of a sham review of a rejected candidate or unreasonable denigration of the rejected candidate’s qualifications but inflation of the successful candidate’s qualifications. In this case, the 10th Circuit concluded a reasonable juror could find that Mike, with his two bachelor’s degrees and MBA, was better educated than either manager Safeway hired. One didn’t have a college degree but had 20 years of experience in the Denver distribution center (10 as a supervisor), and the other—an external candidate with warehouse management experience at Chrysler and previous experience at a different Safeway distribution center—only had a bachelor’s degree in business.

Evidence that Mike met his individual and departmental goals and increased efficiency as a supervisor in the produce warehouse established that he had the experience and demonstrated performance to qualify him for the job. In fact, Safeway’s internal talent acquisitions team identified him as a candidate who should be considered for the manager openings, but Neil refused even to interview him.

(2) Procedural irregularities. Disturbing irregularities in employment procedures can also establish pretext. In this case, evidence showed that Safeway typically preferred managerial candidates with a college degree in logistics or business.

However, Neil acknowledged he had authority to—and did—modify the qualifications for the manager positions, limiting the preferred degree to logistics (not business) and allowing work experience to substitute for education. The 10th Circuit concluded that a reasonable juror could believe that these changes were made to rig the process against Mike’s superior educational background.

(3) Past treatment. An employer’s past treatment of an employee can be evidence of unlawful bias or animus, but stray racial comments aren’t admissible unless they’re tied to the personnel decisions or the decision makers. In this case, there was evidence that Neil had treated Mike worse than other employees and had made some remarks that could be perceived as race or national origin-based—such as telling him that his coworkers don’t perceive him well and that in the States, perception is reality; or saying “You can’t call me racist because I hired you.” Because these comments were made by the decision maker, a juror could consider them as evidence of pretext.

(4) Differential treatment. Differential treatment of similarly situated individuals is “especially relevant” to measuring the validity of an employer’s stated justification. In this case, Neil said he wouldn’t promote Mike because the produce warehouse had been underperforming for 10 years and because he struggled to control absenteeism and occupational injuries and had poor relations with coworkers. But one of the manager positions was filled by an internal candidate from the same underperforming warehouse who had been counseled about absenteeism and injury issues and didn’t get along with some employees. This differential treatment cast doubt on the veracity of Safeway’s justifications.

(5) Use of subjective criteria. The use of subjective criteria—such as the “potential for success” and “leadership and communication skills” standards used here—isn’t enough by itself to establish an inference of discrimination. But when such malleable criteria are the basis for an adverse employment action, their use can magnify the inferences raised from other evidence.

(6) Minority employment. A general policy or practice with respect to a disadvantaged group can also support other evidence of pretext. In this case, the Denver distribution center hadn’t had any African-American managers during Mike’s tenure with the company, and there hadn’t been any African-American supervisors until he was promoted (following a complaint of discrimination).

The 10th Circuit acknowledged that any one of those factors alone might be insufficient to establish pretext. But viewed properly all together, the court held that the evidence was sufficient for a reasonable juror to disbelieve Safeway’s explanations for not promoting Mike. It thus reversed summary judgment for Safeway and sent the case back to the district court for further proceedings.

Meat and Potatoes

This case is a reminder that the line between legitimate and pretextual actions can be razor thin—here, even the courts disagreed. But it also underscores the importance of HR best practices that weren’t followed here (such as consistency in job descriptions and hiring protocols) and the value of job-placement audits that might identify and allow you to address potential biased decision makers before you face a lawsuit.

Charles McClellan—a partner with Foulston Siefkin—is a contributor to Kansas Employment Law Letter. You can reach him at (316) 291-9764 or[email protected].

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