Dawn Lui, a Chinese American woman in her late fifties, began working for the United States Postal Service (USPS) in 1992 and became a Postmaster in 2004. In 2014, she became Postmaster at the Shelton, Washington Post Office. After her appointment, employees filed numerous complaints and grievances against her. In sworn declarations, Lui and her supervisor, Charles Roberts, stated that these complaints were false and motivated by Lui’s race, sex, and national origin. Lui reported being called “Asian b****” and “witch,” and a coworker confirmed hearing repeated comments that “Dawn can’t read or speak English and doesn’t understand it.”
During one grievance investigation, an interviewer asked Lui whether she had a personal relationship with Roberts. Lui attributed the question to the fact that Roberts’s wife is Asian.
Roberts reported concerns about Lui’s treatment to HR Manager Alexis Delgado. Roberts told Delgado that he believed that Union Representative Renee Pitts and others were targeting Lui based on her race. He stated that Delgado did not investigate and instead worked closely with Pitts to build a disciplinary case against Lui. Roberts also stated that Delgado and Labor Relations Manager Lacey O’Connell repeatedly questioned whether he and Lui were romantically involved. Roberts raised concerns with his supervisor, Darrell Stoke, and requested a meeting to discuss his concerns. However, Stoke invited Delgado to the meeting, preventing Roberts from addressing her conduct. At the meeting, Stoke and Delgado said they wanted Lui removed from USPS and asked Roberts to support the decision. Roberts stated that “it was made extremely clear” that if he did not propose a viable alternative to discipline, they would move him to another position so that a replacement would sign off on Lui’s discipline. Roberts recommended a downgrade, which he believed preserved Lui’s position.
Delgado and Stoke drafted a notice of proposed downgrade transferring Lui to the lower-paid Postmaster position at the smaller Roy, Washington Post Office. The notice, dated October 28, 2019, charged Lui with: (1) coercing a carrier to accept a schedule change that violated the union contract; (2) throwing a clipboard and kicking packages; and (3) bringing a non-employee into a restricted area during a workplace investigation. Roberts refused to sign the notice, stating the charges were false and racially motivated. USPS temporarily removed him. His successor, Carter Clark, signed the notice.
In November 2019, Lui filed an informal EEO complaint alleging a hostile work environment, discrimination, and retaliation. She also appealed the downgrade to Tacoma Postmaster Karen Bacon. Roberts stated that, before the appeal, he had shared concerns with Bacon about racial bias in the disciplinary process. On February 11, 2020, Bacon upheld the first two charges and confirmed the downgrade.
USPS reassigned Lui to the Roy office. USPS placed Robert Davies, a less experienced white man, in charge of the Shelton office with the title Officer in Charge. A new permanent Postmaster was not appointed until roughly two years later.
In March 2020, Lui filed a formal EEO complaint, reiterating the allegations of her informal complaint. Lui also appealed Bacon’s decision to the Merit Systems Protection Board. The Board affirmed her demotion, and she filed suit against USPS in federal district court. Lui alleged that USPS violated Title VII by (1) discriminating against her based on race, sex, national origin, and age by demoting her; (2) subjecting her to a hostile work environment involving racial slurs, false complaints, and biased investigations; and (3) retaliating against her for engaging in protected activity related to a workplace harassment complaint.
USPS moved for summary judgment, asking the district court to dismiss all of Lui’s claims. The district court granted summary judgment to the USPS on all three of Lui’s Title VII claims. The district court found that Lui failed to establish a prima facie case of discrimination, failed to exhaust administrative remedies for her hostile work environment claim, and failed to show a causal connection between protected activity and her demotion to support her retaliation claim. In the alternative, the court held that even if Lui had established a prima facie case of discrimination, USPS had articulated a legitimate, nondiscriminatory reason for Lui’s demotion and that Lui had not presented evidence of pretext. Lui appealed.
First, the Ninth Circuit addressed Lui’s claim that USPS discriminated against her by treating her differently based on race. The Ninth Circuit applied the burden-shifting framework from McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Under that framework, a plaintiff must first present a prima facie case of discrimination by showing: (1) membership in a protected class; (2) qualification for the position; (3) an adverse employment action; and (4) circumstances giving rise to an inference of discrimination. The district court had held that Lui failed to meet the fourth element because she was not replaced by a “similarly situated” individual. The Ninth Circuit disagreed and held that Lui satisfied the fourth element by showing she was demoted and replaced by a less experienced white man. The Ninth Circuit explained that Title VII plaintiffs can satisfy the fourth element either by showing that similarly situated individuals outside their class were treated more favorably or by showing that they were replaced by someone outside their class. The Ninth Circuit noted that some decisions cite only the “similarly situated” language without referencing the alternative means of showing circumstances that give rise to an inference of discrimination, which caused confusion.
The district court concluded that Lui had not met her prima facie burden. However, it also ruled that even if she had met that burden, USPS had presented a legitimate, nondiscriminatory reason for the demotion, which was employee misconduct. The Ninth Circuit disagreed. The Ninth Circuit held that even if the final decisionmaker lacks discriminatory intent, an employer can still be liable for discrimination if a biased subordinate influences the final decisionmaker. The Ninth Circuit found that Bacon, who approved the demotion, conducted no interviews, admitted she did not know the complainants’ racial identities, and relied exclusively on documents prepared by individuals accused of bias. Bacon also disregarded warnings from Roberts about discriminatory motives. The Ninth Circuit concluded that a jury could reasonably find that Bacon’s decision was not independent. Therefore, the district court’s grant of summary judgment on the disparate treatment claim was improper.
The Ninth Circuit also vacated the district court’s ruling on Lui’s hostile work environment claim. It held that Lui exhausted her administrative remedies by contacting an EEO counselor within 45 days of receiving the notice of proposed downgrade. The Ninth Circuit further explained that discrete acts may contribute to a hostile environment claim when viewed as part of a pattern. Lui alleged ongoing discriminatory treatment culminating in the downgrade, and the downgrade involved actors who she had accused of bias. Therefore, the Ninth Circuit held that the downgrade could reasonably be considered part of the hostile environment. It remanded for the district court to address the merits of the claim.
Finally, the Ninth Circuit affirmed summary judgment on the retaliation claim. To prevail on the retaliation claim, Lui needed to show: (1) she engaged in protected activity; (2) she suffered an adverse employment action; and (3) a causal connection between the two. Lui argued that USPS demoted her in retaliation for her role in investigating a sexual harassment complaint. The Ninth Circuit affirmed summary judgement on the grounds that Lui failed to show a causal connection between her role in the investigation and her demotion. Bacon testified that she did not consider the misconduct charge related to the investigation and based her decision solely on the two other misconduct charges. The court found no evidence that this rationale was pretextual.
The Ninth Circuit reversed the grant of summary judgment on the disparate treatment claim, vacated and remanded the ruling on the hostile work environment claim, and affirmed the grant of summary judgment on the retaliation claim.
Lui v. DeJoy (9th Cir. 2025) 129 F.4th 770.