3-10-2011; Our Seventh Circuit reverses summary judgment and remands an EEOC wrongful discharge case for trial where the employer changed their defense posture more times than Spinal Tap changed...

Employers should beware of the wrongful discharge minefield. The message for employers in this ruling is to always be able to document a valid, non-discriminatory reason for a termination, especially when the termination is temporal to the employee’s complaint of discrimination.

In Loudermilk v. Best Pallet Company, LLC (U.S Court of Appeals, 7th Cir. Feb. 18, 2011) Plaintiff Loudermilk appealed summary judgment for the employer, arguing the District Court erred by assuming the facts in a light more favorable to the moving party. In this regard, we believe the Seventh Circuit was correct and properly remanded this case for trial. In doing so, the Seventh Circuit restated the well-established rule that in any motion for summary judgment, the judge must consider the facts in a light most favorable for the non-moving party. This rule was clearly not followed by the District Court. However, there are greater lessons to be taken from a closer reading of this decision.

Loudermilk, an African-American, worked on a machine that broke down pallets. He claimed Hispanic workers were always allowed to work in teams of two, however he was required to work alone, which resulted in his falling behind and unfair criticism of his performance. Loudermilk lodged verbal complaints and mentioned his intention to file with the EEOC. When he began to take pictures at work to support his claim of unfair treatment, his supervisor, Lyons told him to stop and to put his complaints “in writing”. The next day, Loudermilk presented a written note to Lyons who fired him on the spot.

The employer in this case put forth a collage of defenses, which seemed to only raise the suspicions of the Seventh Circuit that the employer was scrambling to “legitimize” the termination.

First, the employer argued termination was due to the prohibition of picture-taking by employees. However, this was not the reason given to Loudermilk or the EEOC early in the investigation, and the employer could not identify any specific rule prohibiting such action. The Court pointed out what may have been a “cooked up” defense was also dangerously close to conceding retaliation, because the photos were being taken to prove the alleged discrimination. The Court explained such impromptu prohibition against pictures looked a lot like an attempt to block evidence-gathering for the investigation. We are troubled by the Court’s dicta here, as we believe employers should not have to deal with such tactics by every disgruntled employee before a formal claim of discrimination is even made.

Next, the employer argued Loudermilk was let go due to a RIF or reduction in force. However, Loudermilk was not on the list of workers slated for layoff. So again, this reason appeared to fail as a defense and appeared to be a pretext for the real reason for the termination.

Next, the employer argued termination was “mutual” but of course, Loudermilk rebutted that claim quite easily, as he was abruptly fired without recourse on the spot.

The  Seventh Circuit went on to point out the timing of the termination in relation to Loudermilk’s complaints of discrimination could support the validity of the charge as well. This is something the District Court refused to consider, however, the Seventh Circuit explained an adverse action such as termination can come so close on the heels of a protected act (i.e., report of discrimination) that an inference of causation is reasonable. The Court was careful to point out suspicious timing alone was not enough to survive summary judgment; instead the courts must look at the context of the termination and consider if the employer’s stated reason for termination was “fishy enough” to support an inference of discrimination. In the end, the Court found the employer’s plethora of “cooked up” defenses suspicious enough to give weight to the temporal relationship between the grievance and the termination.

The message to employers here is simple; when any of your employees has engaged in a protected activity such as FMLA application, a workers’ comp claim or a complaint of discrimination, you must be mindful that any contemporaneous adverse action such as demotion or termination can permit an inference of unlawful discrimination under Title VII of the Civil Rights Act of 1964. You may win at the jury trial but you are almost certainly going to have to go before a jury to defend yourself. Your HR directors and managers must document the employee’s personnel file early and often with performance or insubordination concerns, so when you do want to terminate for legitimate reasons, your employees cannot cry foul without rebuttal.

This article was researched and written by John P. Campbell, Jr., J.D. Please do not hesitate to contact or reply to John at jcampbell@keefe-law.com.