New York Employment Lawyer Blog

This month, a Federal racial discrimination case filed by the U.S. Equal Employment Opportunity Commission (EEOC) against retailer Target Corp. in Wisconsin concluded with a settlement of $510,000 and additional terms.

The EEOC’s suit claimed that in 2000 and 2001,Target improperly denied management jobs to four African-American applicants. Three applicants were not interviewed, and one who had interviewed but did not get the job, despite testing well on Target’s own leadership ability test. The EEOC also claimed that Target failed to make and preserve records relevant to the determination of whether the company had engaged in unlawful employment discrimination practices.

The U.S. District Court for the Eastern District of Wisconsin granted Target’s motion for summary judgment. On appeal, the U.S. Court of Appeals for the Seventh Circuit in 2006 reversed and remanded, finding in its opinion that, although Target revised its record keeping policy, nothing in Target’s new policy clearly prevented bad faith destruction of resumes or other employment application documents. The Court of Appeals also found that, with regard to Target’s decision not to hire the applicant who took the leadership test, Target presented “an ostensibly objective nondiscriminatory reason but failed to articulate what criteria informed this reason.”

With regard to the other three applicants, the court found that “the EEOC did present sufficient evidence to establish a genuine issue of material fact as to whether Target’s reason for not interviewing [the three applicants] was a pretext for race discrimination,” The court also noted that although Target argued that its hiring manager could not have discriminated against the three applicants because he did not know their race, but the EEOC presented evidence that created a genuine issue of material fact as to whether the manager indeed knew the applicants’ race. In a press release, the Director of the EEOC’s Chicago District Office said that the appeals court decision was “noteworthy for its ruling that the trial court could admit into evidence expert testimony to the effect that the employer may have racially identified the applicants as African American on the basis of their names or accents heard during telephone conversations.”

Following the U.S. Court of Appeals' reversal, the EEOC and Target settled the suit by way of a consent decree. According to the EEOC release, under the 30-month consent decree, Target agreed to pay a total of $510,000 to the four applicants and to revise its document retention policies, provide training to supervisors on employment discrimination and record-keeping, report on hiring decisions, and post a notice about the decree to employees in its District 110 stores and offices.

On December 3, 2007 the U.S. Supreme Court heard oral argument on an age discrimination case, Sprint/United Management Company v. Mendelsohn, No. 06-1221 - the so-called “Me Too” case. The central issue in the case is whether a plaintiff may properly introduce testimonial evidence of other former employees to prove discriminatory intent of an employer, notwithstanding the fact that these other employees worked under different supervisors than the plaintiff.

In Sprint/United, Ellen Mendelsohn, who was discharged at age 51 by Sprint, sought to prove that she was terminated on account of her age in violation of the Federal Age Discrimination in Employment Act during a company-wide reduction in force (RIF). Mendelsohn attempted to support her allegations by introducing the testimony of five other former employees around the same age. Sprint moved to exclude the evidence, arguing that any reference to alleged age discrimination by any other supervisor other than Mendelsohn’s was irrelevant to the issue of whether Mendelsohn’s termination was motivated by her age. The U.S. District Court for the District of Kansas granted Sprint’s motion to exclude the testimony and the jury later returned a verdict for Sprint. However, on appeal, the U.S. Court of Appeals for the Tenth Circuit found that the lower court erred in excluding the testimony of the employees working under different supervisors. Sprint appealed that decision, and the matter is now before the Supreme Court.

The crux of Sprint's argument before the Supreme Court was that such testimony from other employees should be excluded under the Federal rules of evidence. “An employment decision is made by the person who made it...,” Sprint maintained. “If some other person harbors bias, that’s unfortunate -but it’s not probative of claims by a plaintiff who is not affected by it.” Justice David Souter at one point seemed to agree with Sprint’s argument, and said that such testimonial evidence was very close to being “substantially misleading or prejudicial.”

In contrast, the Court of Appeals had made the following observation: “This case...is not about individual conduct but about a company-wide policy of which all Sprint’s supervisors were allegedly aware.” As such, if the supervisor did not make the allegedly discriminatory decision in a vacuum, and allegedly made it as part of a larger, odious scheme handed down from upper management, shouldn't the jury be permitted to hear testimony that involved other supervisors’ discriminatory conduct that arguably originates from on high? Such evidence would clearly be probative, even vital, in this scenario.

As the appellate court pointed out, applying a limited "same supervisor" rule in the context of a company-wide reduction in force would in many cases make it difficult, if not impossible, for a plaintiff to prove a case of employment discrimination based on circumstantial evidence. To apply the same supervisor rule in these types of cases would, as the appellate court insightfully pointed out, “create an unwanted disparity between those cases where the plaintiff is fortunate enough to have other RIF’d employees in the protected class working for her supervisor, and those cases where the plaintiff is not so fortunate.” It will be interesting to see what the Supreme Court decides.