EEOC LOSES LAWSUIT BASED ON ALLEGED "DIRECT EVIDENCE" OF RACIAL DISCRIMINATION


By: Frances Rogers
October 07, 2010

A rogue manager who exceeded his authority and another who implied disapproval of an applicant based on her race was not enough for the Equal Employment Opportunity Commission (EEOC) to survive summary judgment against a company based on the rare "direct evidence" theory of racial discrimination. 

In Equal Employment Opportunity Commission v. Con-Way Freight, Inc. (8th Cir. Sept. 22, 2010) – F.3d -- , Roberta Hollins was introduced to a branch service manager for the nationwide shipping company through a mutual friend.  The branch service manager informed Hollins that he hoped to create a position of part-time customer service representative and believed she would be perfect for the position. Hollins completed an application on which she disclosed two misdemeanor shoplifting convictions.

The branch service manager informed the region manager that he had the "ideal candidate" in Hollins for the new position. The region manager, upon learning Hollins was African-American, stated that it would be "opening up a can of worms" by hiring Hollins and that he "probably [didn't] want to go that route."  The branch service manager later received permission to interview candidates for the position and interviewed Hollins a second time. The branch service manager told Hollins that the region manager had told him not to hire Hollins because he was "just asking for the NAACP".[1]  The branch service manager told Hollins that he preferred her for the position, though he had also told another applicant the same thing. The branch service manager also told Hollins that the company had a policy of automatically disqualifying applicants with any theft-related convictions but that she should not worry about it because he did not believe the company would search as far back as the dates of her convictions.

The branch service manager then violated company policy by sending Hollins and his other top choice for the position to be drug tested. The company's policy was that a criminal background was to be performed, first, and then after the background was approved, the company would make a conditional offer of employment based upon the completion of a successful drug test. Before choosing a candidate to submit to the personnel department for consideration, the branch service manager was fired.

When Hollins did not hear from the branch service manager after her drug-test results, she contacted the region manager who explained that the branch service manager no longer worked there and that they were not doing any hiring at the time.  When she told the region manager she had already been hired and completed a drug test, the region manager stated he would get back to her, but he failed to do so.  When Hollins called again, she spoke to an employee who told Hollins that when a new branch service manager was hired, Hollins' application would be "on the top."

A new branch service manager was hired. Unaware of the status of previous interviews, the new service manager was contacted by a third job applicant for the same position who informed the new branch service manager he had been promised the job by the former branch service manager. After the new service manger received approval to fill the position, he interviewed and hired the applicant who had contacted him.  Hollins then filed a complaint with the EEOC that later led to the instant lawsuit.

The EEOC proceeded in the lawsuit based on the "direct evidence" theory of racial discrimination.  To survive a summary judgment on such a theory, the EEOC was required to produce evidence, which may be circumstantial, showing a specific link between an employer's discriminatory animus and the adverse employment action sufficient to support a finding that a reasonable fact finder would believe an illegimate reason motivated the adverse employment action.

The Eighth Circuit Court of Appeals concluded that the district court was correct in finding that the EEOC could not survive summary judgment. There was insufficient evidence of a causal link between the statements made by the region manager and the former branch service manager and the company's failure to hire Hollins.  Although EEOC argued that "but for" the region manager's comments about "opening a can of worms," the branch service manager would have moved faster in hiring Hollins, the court found this ignored the fact that the branch service manager did not have the authority to hire Hollins without the personnel department's approval following a successful background check. The fact was that even if the former branch service manager attempted to hire Hollins, the company would have automatically disqualified her based on her previous theft-related convictions because the company had a long-established practice of automatically disqualifying applicants with theft-related convictions.

The EEOC attempted to argue that the company failed to prove the existence of the policy of automatically disqualifying applicants based on theft-based convictions because the policy was not written. The court found there was no cited legal authority for the proposition that a policy must be in writing to be effective. The company provided adequate evidence that within the span of 18 moths it had disqualified 28 applicants solely because of theft-related convictions; that no employees working at the subject service center had convictions on their record; and that its designated corporate representative had personally disqualified numerous applicants because of theft-related convictions.

The EEOC then attempted to argue that the company's policy, even if proven, would only limit the available remedies to injunctive and declaratory relief, and attorney's fees, but would not be a complete defense to liability. The court disagreed. While that may be true in a "mixed-motive" case (where an employer has both legitimate and discriminatory reasons for its adverse employment action), this is not applicable to a "single-motive" case.  The company only had one reason why it did not hire Hollins. Hollins' name had never been forwarded to the personnel department prior to the former branch service manager's termination, and she was apparently unknown to the new branch service; thus, she had never been considered as an applicant. 

Lastly, the EEOC attempted to establish a prima facie case of racial discrimination under the more common burden-shifting theory. However, Hollins would have to show she was a qualified applicant, and since the company proved it had a policy of denying applicants with any theft-related conviction, Hollins failed to prove she was qualified for the position.

This decision lends some hopeful reassurance to employers that rouge managers will not always necessarily sink the company. In this case, it was fortunate for the employer that the decisionmakers were not even aware of the applicant, let alone of any alleged discriminatory animus. However, this should not provide employers with a false sense of security. Managers and supervisors who exceed their authority or have displayed, even circumstantially, a discriminatory animus can harm employers. Training and pro-active upper management can protect against liability.

This article was written by Frances Rogers, an attorney with the labor and employment law firm of Liebert Cassidy Whitmore.  Ms. Rogers is an Associate in the Los Angeles office and can be reached at (310) 981-2000 or frogers@lcwlegal.com.  For more information regarding the discussion above or on our firm please visit our website at www.lcwlegal.com, or contact one of our offices below.

Liebert Cassidy Whitmore publishes this article as a service to our clients and other friends for informational purposes only. It is not intended to be used as a substitute for specific legal advice or opinions and the transmission of this information is not intended to create an attorney-client relationship between sender and receiver. You should not act upon this information without seeking professional counsel. 


[1] Referring to the civil rights organization, National Association for the Advancement of Colored People.

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