Court finds ethical considerations, not same-sex relationship, determined demotion decision

published in McAfee & Taft EmployerLINC | June 9, 2017

By Paige Good

The issue of pretext recently played out in a sex discrimination case in which the Tenth Circuit Court of Appeals had to decide whether an employer’s reasons for demoting an employee were legitimate or just a ruse to cover up discrimination.

Doctor’s romantic relationship leads to series of complaints

Dr. Tawny Hiatt worked at a counseling center operated by the University of Denver, where she supervised psychology students seeking their professional licenses. In late 2012, Dr. Hiatt began supervising Dr. Abby Coven in Coven’s private practice, which was unaffiliated with the clinic. A romantic relationship between the two developed, and in early 2013 Dr. Hiatt discontinued her supervision of Dr. Coven’s work in private practice while they continued their personal relationship.

By late January 2013, word had spread among the supervisees about the romantic relationship between Dr. Hiatt and Dr. Coven. Several weeks later, an open meeting was held so that Dr. Hiatt and the interns could air any concerns. After that meeting, three interns elected to end supervision with Dr. Hiatt, and another complained about Dr. Hiatt’s supervision style, stating it was akin to therapy rather than teaching. Meanwhile, Dr. Hiatt’s supervisor, Dr. Kent, sought ethics guidance from the University and the American Psychological Association. The APA advised that the situation with Dr. Hiatt was an “ethical gray area” because psychologists are prohibited from having sexual relationships with supervisees or those with whom the psychologist has a professional relationship. Dr. Kent discussed these issues with Dr. Hiatt, who proceeded to blame the supervisees instead of take personal responsibility for the interns’ reactions to the situation.

In late February of 2013, the University asked Dr. Hiatt to resign, be demoted, or allow Human Resources to handle the matter. Dr. Kent advised Dr. Hiatt of the reasons for the decision: interns refused to be supervised by her, her actions fell within an ethical gray area, and her lack of personal responsibility. Dr. Hiatt reluctantly chose demotion.

Demoted doctor files claims of sex discrimination and retaliation

Following her demotion, Dr. Hiatt filed an internal grievance and EEO complaint in September of 2013. The University explained that Dr. Hiatt’s romantic relationship with a supervisee was not the reason for her demotion – rather, it was merely the catalyst for a series of complaints in which Dr. Hiatt’s questionable supervisory techniques were revealed. After not being reinstated to her supervisory role, Dr. Hiatt resigned on May 30, 2014.

Dr. Hiatt then filed a lawsuit for sex discrimination and retaliation pursuant to Title VII. Focusing on the demotion claim, the Tenth Circuit (the federal appeals court over Oklahoma) found that the University stated legitimate, non-discriminatory and non-retaliatory reasons for Dr. Hiatt’s demotion: the upheaval among her students, the ethically gray manner in which she handled her relationship with Dr. Coven, and her inappropriate therapy-based supervisory style.

The court found that these legitimate reasons for her demotion were not pretextual based primarily on “consistency” – namely, that the University never waivered or altered its explanation of why Dr. Hiatt was demoted at any point in the process, from the handling of the internal grievance and the EEO complaint all the way through the lawsuit. The court also found that the University’s investigation into the ethics of Dr. Hiatt’s personal relationship was substantial and bore no marks of unfairness. The fact that the revelation of Dr. Hiatt’s personal same-sex relationship had the unexpected effect of shedding light on her questionable supervisory style was of no consequence.

The takeaways

The Tenth Circuit’s published decision is notable in a couple regards. As many employers know, the Tenth Circuit does not per se consider sexual orientation as a protected class under Title VII. Instead, it protects against unlawful gender stereotyping. But in the case of Dr. Hiatt, no unlawful gender stereotyping was found, despite the fact that it was not until her same-sex relationship was revealed that issues arose that led to her demotion. Another takeaway particularly important for employers is that consistency is key. Here, the employer was able to obtain summary judgment because it was consistent in its explanation of its business judgment throughout the entire process.

  • Hiatt v. Colorado Seminary, No. 16-1159 (10th Cir. June 2, 2017)