Employer Must Make Clear Decision the First Time

February 8, 2018

A recent decision from the Fifth Circuit Court of Appeals has again emphasized the importance of an employer making the right decision regarding the handling of an employment matter at the very start and not changing the rationale for an employment decision throughout the handling of the employment matter or any subsequent litigation.  In this decision, the Court of Appeals upheld the denial of a motion brought by the employer who was found to have engaged in sex discrimination in the manner of transferring a female sales associate from one territory to another territory resulting in a significant loss of income from sales commissions.

The background of the decision is important but what is more important is the finding by the Court of Appeals that the employer cannot support a claim the verdict should be changed because the record showed that the employer kept changing its explanation for the decision to transfer the female employee to another sales territory.  The court case involved the transfer of a female sales associate to another territory and the placement of a male associate in the sales territory that included very high-end real estate that was the basis for sales revenue.  During the course of explaining the decision to transfer the female sales associate, the company identified various reasons for the transfer, including a staffing change due to a promotion, a need to disrupt the working relationship between the two sales associates for this territory, and there were training needs that required the female sales associate to be transferred.  The Fifth Circuit Court of Appeals made the observation that the company was showing “shifting reasons” for the transferring of the employee which led to the strong suspicion that these reasons were really a “pretext” for the real reason for the transfer, being discrimination on the basis of sex.  The Court of Appeals held that there was no basis to overturn the jury decision that awarded significant monies to the female sales associate based upon alleged discriminatory conduct.

This decision shows the importance of an employer making a clear decision for any employment action at the time of the decision and not changing the reasons after doing further investigation or seeking advice on how to proceed.  The fact that the employer has “shifting reasons” for taking certain employment action can raise deep suspicions the employer is really acting contrary to the protections afforded under either state or federal law against discriminatory conduct

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