Thursday, March 25, 2010
The Fifth Circuit decided an important retaliation case yesterday. In Smith v. Xerox, the court held that a plaintiff could use a mixed motives theory in a retaliation case under Title VII.
Kim Smith won a jury verdict against Xerox for her claim that she was fired for filing an EEOC charge. Smith had supported Xerox dealers, and had been a great employee until her territory was changed without a corresponding change in her sales goals. She was disciplined for her failure to meet these goals, with an eye towards further discipline after a set period of probation if her performance didn't improve. She filed her charge before that period expired, and it appears that Xerox began termination proceedings within seven days of that, well before the probationary period ended. Xerox also failed to follow its own procedures in connection with the probation after that point. At trial, Smith requested and the jury was given a mixed motives instruction. The jury found that Xerox was motivated to terminate her in part by the EEOC charge and also found that it would not have made the same termination decision had she not filed the charge. She was awarded compensatory and punitive damages.
While the case was on appeal, the Supreme Court's decision in Gross was issued, and Xerox argued that the case controlled, making the mixed motives theory unavailable in retaliation cases. The Fifth Circuit disagreed. The court noted that as was significant in Gross, the amendment to Title VII that added the "motivating factor" language, codifying that part of Price Waterhouse, did not refer to retaliation. However, the court noted that Price Waterhouse interpreted what the terms "because of" meant in Title VII. The Court in Gross interpreted the same term, but in the ADEA. The Fifth Circuit felt bound to follow the line of cases interpreting the language in Title VII and likewise felt bound to interpret the "because of" in the retaliation provision the same way it was interpreted for the substantive provision. And following the logic of the Court in Desert Palace v. Costa, the Fifth Circuit held that there was no need for direct evidence of retaliation to shift the burden.
The Fifth Circuit thus upheld the verdict of retaliation, but reversed the award of punitive damages, finding that there was not sufficient evidence to show that her managers acted with malice or reckless indifference that the termination would violate Title VII.
The Fifth Circuit's analysis harmonizes Gross and Price Waterhouse in an interesting way. It seems that many of us have taken for granted that Gross would control the motive question for retaliation questions, but that does create a real problem within Title VII, given the fact that the Court in Price Waterhouse had interpreted what "because of" means in Title VII, not limiting its analysis to the substantive provision. Drawing the line at the borders of the ADEA or at the very least, the borders of Title VII is a middle ground. We'll have to see whether the other circuits or potentially the Supreme Court agree.