by Paul
Ross
As veterans of employment litigation can tell
you, employment discrimination claims are rarely supported by direct
evidence
of discriminatory decision making. In the overwhelming majority of
cases,
employees support their entire case with circumstantial evidence. In
short,
they attempt to cast as much doubt as possible on the reasons offered by
the
employer for its employment decision, leaving the jury to conclude that
there
must be some other, more sinister reason for the decision — illegal
discrimination. In essence, they ask the jury to conclude that the
employer’s
stated reason for its decision wasn’t the “real” reason but, instead,
was
pretext to hide illegal discrimination.
Of course, this approach is maddening to
employers because it’s a judicial process that essentially calls the
employer
a liar: “Sure, sure, we know what you say under oath, but we’ll allow
the jury
to conclude that you’re committing perjury — a federal crime — to cover
up
discrimination through the employee’s use of indirect evidence;
evidence that
is subject to interpretation and always less than clear.” Welcome to
federal
court employment litigation.
A recent decision by the Tenth U.S. Circuit
Court of Appeals (which covers Oklahoma) provides some important
guidance to
employers about one of the most common forms — indeed, the original form
— of
pretext evidence: the annual employee performance review.
The performance appraisal problem
In 2005, Boeing sold its local facility to
Spirit Aerosystems. Spirit intended to continue operations at the plant
and
asked Boeing to recommend which of its former employees should be
retained.
The employee at the center of this case filed suit against Boeing and
Spirit
after his former manager recommended that Spirit not hire him.
In defense of his recommendation, the manager testified that
the employee, when
compared to his coworkers, had “limited skills,” performed with “low
quality”
and “low productivity,” and had “marginal teaming abilities” — all
legitimate
nondiscriminatory reasons that would support the decision not to retain
him.
Lacking any direct evidence of discriminatory intent, the
employee contended that his
former manager’s explanation wasn’t the “true” reason for the decision,
but a
pretext for age discrimination. To support his claim, he offered his
most
recent performance appraisal.
His review reflected that he “met all expectations” in every
category, including
technical skills, knowledge, productivity, quality, and “people working
together.” The comments section included a statement that he “performed
well”
and instructed him to “keep up the good work.” The employee argued that
the
evaluation expressly contradicted the reasons offered by his former
manager and
that a jury should be free to conclude that his age was the true reason
for the
decision.
The
Tenth Circuit agreed and ordered a jury trial on the issue. The court
held that
the disparity between the employee’s written evaluation and the
justifications
later given by Boeing was sufficient, on its own, to require a jury
determination on pretext. Thus, even without any affirmative evidence of
age
discrimination, a jury will be allowed, should it so choose, to conclude
that
Boeing discriminated against the employee because of his age. Woods
v. The
Boeing Company, 2009 WL 4609678 (10th Cir., 2009).
Takeaway
Although this case breaks no new legal ground, it’s a
reminder of employee documentation
as critical circumstantial evidence. In that regard, it highlights two
important
lessons for employers. First, annual employee evaluations are of no
assistance
unless they are authored with complete honesty. In fact, as this case
shows,
they can be of significant detriment. Managers must be trained to
carefully and
thoughtfully review their employees and offer complete and honest
feedback
regarding performance. They must avoid the convenience of blanket
“meets
expectations” reviews and the temptation to avoid confrontation with
underperforming employees. Otherwise, it’s better not to do evaluations
at all.
Second, HR professionals and managers alike
must consider performance appraisals when contemplating disciplinary
measures
or other significant employment decisions. Before taking action,
evaluate key
documents (e.g., performance reviews) to ensure they don’t contradict
the action or support a “pretext” argument by the employee. If an
evaluation
reveals an issue, consider alternatives that will aid in building an
appropriate
record of the performance problems at issue.
Employer decision making will continue to face exhausting
scrutiny under the microscope
of “pretext” analysis. However, this case is a shining example of
preventable
pretext problems and should serve as a strong reminder to employers to
properly
manage your annual evaluation programs.