Sex Discrimination Claims: Make Sure Your Paper Trail Wins, Rather Than Costs You, Your Case
Anne E. Larson, Chair of the firm’s Labor & Employment practice group, concentrates her practice on management-side labor and employment matters and tries discrimination, wage and non-competition/trade secrets disputes in state and federal courts throughout the country. Business owners depend on Anne for anti-harassment training and cost-conscious advice on their hiring/firing practices, employee handbooks, and disability and leave issues. Executives rely on her negotiating skills for their compensation and severance agreements. Anne can be reached at 312.521.2728 or alarson@muchshelist.com.
By Anne E. Larson
The federal district court in Chicago recently ruled that a sex discrimination case against Motorola, Inc. would go to trial because Motorola’s evidence did not necessarily disprove gender bias. The court held: "[Motorola] offers very few objective or quantifiable measures pointing to Plaintiff’s performance failings, and there is evidence that [the CEO] and those below him attempted to construct a record or paper trail to make up for that failure."
The plaintiff was Motorola’s Chief Procurement Officer and one of its two highest-ranking female employees. For four years, she had reported to Motorola’s No. 2 executive, who regularly gave her strong performance reviews and promoted her. There were some problems during that four-year period, however: "several instances" of negative comments from non-supervisors and ethics complaints regarding the plaintiff’s travel expenses (the latter of which were resolved).
Four months before the plaintiff was fired, the No. 2 executive left Motorola after he was passed over for CEO. At the new CEO's direction, Motorola demoted the plaintiff from its Senior Leadership Team and offered her a severance package, which she declined. The plaintiff believed that her severance package was much smaller than the packages given to the men displaced by the new CEO's reorganization. In addition, she was not allowed to remain employed until her stock options vested, while other displaced executives (all male) were offered new employment at Motorola.
Ultimately, Motorola discharged the plaintiff on the basis that she had been promoted beyond her competence and had lost the support of senior executives due to perceived character issues and complaints from coworkers regarding her personality, work style and penchant for taking credit for others' work. Motorola also cited a talent review poll conducted by the Senior Leadership Team, which rated the plaintiff the worst officer in the company.
The court determined that the case should go to trial because a reasonable jury could conclude that Motorola "was trying to obscure an action that was perhaps illegal" based on:
- The "relatively abrupt shift in Plaintiff's performance indicators" which "might be seen as a reflection of Defendant’s explicit desire to be rid of her rather than providing proof of Plaintiff's occupational failings.”
- A "conspicuously intense four-month period of negative interactions following four years of relatively serene company service."
- A comment the new CEO made in a staff review meeting that he "wants her out, legally," as well as a question posed by Human Resources, "How do we explain this to a jury?"
- The introduction of a ratings system at a Senior Leadership Team meeting that ranked the plaintiff unanimously at the bottom of the executive staff but was never used again.
- Comments made by executives that indicated "they were overreaching in their effort to portray Plaintiff as a poor performer."
What Should Have Been Done Differently?
Based on the limited facts in the court's decision, we may surmise that this lawsuit resulted from behind-the-scenes power struggles and a failure on Motorola's part to adequately address negative coworker comments about the plaintiff during her initial four years of employment. When the No. 2 executive left the company, other employees may have felt emboldened to come forward and complain about the plaintiff. The new CEO may have been influenced by the volume of negative feedback he received about the plaintiff at a time when he was already restructuring the company.
The district court made clear that "lack of support" by senior executives and "significant personality tensions between Plaintiff and other Motorola employees" provide a legitimate, nondiscriminatory basis for discharge. However, when a company bases its discharge decisions on subjective (rather than "objective or quantifiable") performance measures, it is critical to make sure that there is no gender bias behind the personality conflicts and negative comments.
Rather than create a one-time ratings system whereby senior executives ranked the plaintiff the worst officer in the company, Motorola should have focused on documenting the numerous coworker complaints about her. The documentation should have included the facts behind the personality/performance problems, when the problems occurred and why the complaints had not been made earlier. Performance-based issues were likely at the heart of these complaints but were never adequately reported or documented. This kind of documentation may have supported an immediate demotion or discharge.
If Motorola was partially at fault for letting personality problems go unaddressed for four years, the company still had the strategic option of either offering the plaintiff a suitable severance package or creating an action plan for her that included training and specific goals for improvement. Although the law focuses juries on whether the plaintiff was discharged because of discrimination, juries instinctively consider whether a company treated the plaintiff fairly. Juries prefer to see companies have open, honest discussions with employees and give them an opportunity to improve prior to discharge.
What should we take away from this case? Companies should not let fear of employee lawsuits guide their decision-making but should fire or demote employees based on what is best for the company's operations. At the same time, companies should not manufacture a defense, overreach or create "paper trails" that do not accurately reflect the true nondiscriminatory reason for an employee's demotion or discharge. The Motorola case is going to trial on February 26, 2007 because there is an issue of fact over whether "deceit [was] used to cover one's tracks."
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