Attorneys

• James B. Brown
• W. Scott Hardy

Related Practices

• Labor and Employment

Now, more than ever, employers must exercise extreme caution before taking any adverse employment actions. The U.S. Supreme Court recently made it easier for plaintiffs to have their employment discrimination cases heard by juries. It is now far more difficult for employers to have jury verdicts overturned on appeal. Motions to have cases dismissed prior to going to trial will be much more difficult to obtain.

On June 12, 2000, the Supreme Court delivered its opinion in Reeves v. Sanderson Plumbing Products, Inc. The Court held that employees can win employment discrimination cases even if they do not directly prove that their employer intended to discriminate. The plaintiff, Roger Reeves, was a 57-year-old supervisor with 40 years of service. Part of his job was to record the attendance and hours worked of the employees under his supervision. Upper management began to question the accuracy of Reeves’ attendance reports and subsequently ordered an audit of the attendance records.  The audit revealed numerous timekeeping errors and misrepresentations allegedly made by Reeves and two other supervisors. All three supervisors were fired for keeping shoddy attendance records.

Reeves sued for age discrimination and a jury awarded him both compensatory damages and liquidated damages, i.e., a form of punitive damages. The employer’s lawyers attempted to have the case taken away from the jury, and despite being rebuffed by the trial judge, won reversal on appeal. Reeves appealed the case to the Supreme Court. In upholding the trial judge’s initial decision and the jury’s verdict, the Court pointed to evidence that the discrepancies the company claimed to have uncovered in its audit of the attendance records may not have been Reeves’ fault. The Court concluded that direct evidence of age-related discrimination was not required in order for Reeves to prevail on his age discrimination claim.

The Court’s decision enables juries to speculate that an employer’s decision to discharge or discipline an employee was discriminatory, even if no direct evidence of discrimination exists. Now, employee lawsuits are more likely to be heard by juries. Juries, notorious for being generous with company money, now have the Court’s blessing to second-guess company decisions.

The Reeves decision sends a strong message to employers—exercise extreme caution before taking any adverse employment action. It will be much more difficult—if not impossible— to get an employment discrimination lawsuit thrown out of court before the employer’s fate is placed in the hands of a jury. The lesson to be learned from Reeves is simple: before taking any employment action, ask whether the decision will be viewed as fair and well reasoned by a jury. Employers must exercise good judgment by ensuring that facts supporting the adverse employment action are well documented and provable. Supervisor recommendations must be scrutinized before taking action based on those recommendations. The real reason(s) for taking the action must be documented, even if embarrassing or distasteful. Avoid “sugarcoating” performance evaluations or “mischaracterizing” reasons for terminating an employee. The Reeves decision basically puts an end to the practice of ascribing neutral reasons for terminating poor employees. Juries will now be instructed that they may consider an employer’s well intentioned mischaracterization as evidence of wrongdoing.

Now, more than ever, employers must consider every angle before terminating or disciplining an employee. Employers must cautiously and thoroughly scrutinize the facts underlying every potential employment decision to minimize legal risk. Failure to do so is a prescription for disaster.

For more information, please contact jbrown@cohenlaw.com or shardy@cohenlaw.com.