Summary Judgment Remains Important Tool

Background
Facts
Decision
Comment

In the wake of a 2000 Supreme Court decision which raised questions regarding the continued availability of summary judgment as a means of disposing of discrimination cases, the Court of Appeals for the Second Circuit ruled recently in Schnabel v Abramson 232 F3d 83 (2d Cir 2000) that in appropriate circumstances, summary judgment dismissing a discrimination claim may be granted even when a plaintiff has offered a prima facie case of discrimination and evidence that the employer's stated reasons for an adverse employment action are pretextual. In so ruling, the second circuit found that the Supreme Court's decision in Reeves v Sanderson Plumbing Products, Inc 120 S Ct 2097 (2000) - a decision many practitioners predicted would render summary judgment obsolete - did not preclude summary judgment where the evidence does not allow for an inference of a discriminatory motive.

Background

It is well established that in employment discrimination cases alleging disparate treatment, an employee must demonstrate that the purportedly unlawful action was committed with discriminatory intent. Where there is no direct evidence of intent, the Supreme Court has devised a three-step method of proof that relies on presumptions and shifting burdens of production (see McDonnell Douglas Corp v Green 411 US 792 (1973)). Under McDonnell Douglas, an employee has the initial burden of establishing a prima facie case of discrimination. If the employee does so, the burden shifts to the employer to articulate a legitimate, non-discriminatory reason for its actions. Once the employer articulates such a reason, the employee has the burden of proving that his or her protected classification (eg, age) was the real reason for the adverse employment action.

In Reeves v Sanderson Plumbing Products, Inc the Supreme Court addressed whether an employer was entitled to judgment as a matter of law when the employee's case "consist[ed] exclusively of a prima facie case of discrimination and sufficient evidence for the trier of fact to disbelieve the [employer's] legitimate, non-discriminatory explanation for its action". The court rejected the 'pretext plus' standard used by several courts of appeal, which requires that the employee introduce sufficient evidence for a jury to find (i) that the reason provided by the employer for the challenged action was false, and (ii) that the real reason was discrimination. The court therefore held that "a plaintiff's prima facie case, combined with sufficient evidence to find that the employer's asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated". The Supreme Court cautioned, however, that such evidence would not always be sufficient, recognizing that "[c]ertainly there will be instances where, although the [employee] has established a prima facie case and set forth sufficient evidence to reject the [employer's] explanation, no rational factfinder could conclude that the action was discriminatory".

Facts

In the case of Schnabel v Abramson, Schnabel was hired in 1994 as an investigator by Abramson on behalf of the employer (Legal Aid). Three years later, Abramson recommended to Legal Aid's board of directors that Schnabel be dismissed and replaced by the employee who had previously held the position (and who was much younger than Schnabel), in light of his superior qualifications. The following day, Abramson met with Schnabel and asked him to resign. Schnabel refused and complained that:

• Abramson had attempted to force Schnabel to resign so that the younger employee could be re-hired;
  
  
• Schnabel had refused and told Abramson that his act was unlawful;
  
  
• Abramson conceded that his act was discriminatory;
  
  
• Abramson had said he had no complaints about Schnabel's work, but wanted to re-hire the younger employee; and
  
  
• Abramson had threatened to draft a letter stating that Schnabel was fired for cause and place it in Schnabel's file if he refused to resign.

The following day, Abramson advised Schnabel that he was re-hiring Schnabel's predecessor, noting that the predecessor's work was far superior. Abramson also wrote a memorandum setting forth the reasons for his decision, including Schnabel's disdain for clients, difficulty following instructions, poor judgment and inept performance.

Thereafter, Schnabel filed a complaint alleging, among other things, age discrimination against Legal Aid and Abramson.

Decision

The district court granted the defendants' motion for summary judgment and dismissed the action. On appeal, the Second Circuit found that Schnabel had established a prima facie case but that the defendants had articulated legitimate, non-discriminatory business reasons for why Schnabel was dismissed. Schnabel sought to forestall summary judgment by showing that the defendants' stated reasons for terminating him were pretextual. The Second Circuit agreed that a jury could conclude that the stated reasons for firing Schnabel were pretextual, but held that Schnabel "ha[d] not demonstrated that the asserted pretextual reasons were intended to mask age discrimination". Analyzing Reeves, the Second Circuit:

"decline[d] to hold that no [employer] may succeed on a summary judgment motion so long as the [employee] has established a prima facie case and presented evidence of pretext. Rather, we hold that ... Reeves clearly mandates a case-by-case approach, with a court examining the entire record to determine whether the [employee] could satisfy his 'ultimate burden of persuading the trier of fact that the [employer] intentionally discriminated against the [employee]'."

The Second Circuit ruled that summary judgment was appropriate despite the evidence of pretext because no reasonable factfinder could find that age was a determinative factor in the termination decision. It was undisputed that Schnabel had been hired three years earlier at the age of 60 by Abramson. Thus, the court found the following principle especially relevant: "[W]here the person who made the decision to fire was the same person who made the decision to hire, it is difficult to impute to her an invidious motivation that would be inconsistent with the decision to hire". The court also found that:

• Schnabel's age was not discussed in connection with the decision to replace him;
  
  
• Schanbel had failed to offer any evidence that he was subjected to age-based comments or criticism on the job; and
  
  
• Abramson had compared the performance of Schnabel and his predecessor, and believed that the latter was a better investigator.

Comment

It is not suggested that the reasons articulated by an employer for its actions should be anything less than forthright. Indeed, an employer should communicate the true reasons for any adverse action to the employee at the time of the action, to any administrative agency investigating the action and during any litigation challenging the decision.

Despite warnings that Reeves had raised the bar to an almost insurmountable level, Schnabel confirms that a summary judgment motion remains a potent tool for employers to use to cut short meritless suits prior to incurring the expense and risk of trial. Indeed, courts are more likely to grant such a motion when certain factors are present, and employers should tailor discovery to develop these facts.

As recognized in Schnabel, courts are more inclined to grant summary judgment when the decision to take an adverse employment action is made by the same person who hired or promoted the employee, especially when both actions occur within a relatively brief period of time. Thus, once the relevant decision-maker is identified, the employer should produce evidence of further interaction between that individual and the employee (and other members of the relevant protected class). Evidence will include hiring decisions, promotions and positive performance evaluations, all of which will tend to negate the possibility that the individual's actions flowed from a discriminatory intent.

During the employee's deposition, the employer should closely examine the purported basis for the claim. Bare allegations of discrimination (eg, those based merely on the fact that the employee is in a protected class) are insufficient to survive summary judgment. As in Schnabel, critical issues include whether the employee has evidence that his or her protected classification was discussed during the decision-making process, and whether he or she was subjected to comments or criticisms based on such classification. In many circumstances, the dispute will be shown to be no more than a disagreement concerning the wisdom of a business decision; as in Schnabel, courts will refuse to turn such a disagreement into a discrimination claim.

The job history of the plaintiff should also be explored. Although the Schnabel court found that Schnabel had introduced sufficient evidence to satisfy his minimal burden that he was qualified to perform his duties as an investigator, the court was undoubtedly influenced by the defendants' evidence concerning Schnabel's less than brilliant performance during his brief employment.

Despite rumblings that Reeves made summary judgment much more difficult to obtain, Schnabel confirms that this is not so. Employers should take discovery with an eye towards a possible summary judgment motion and not shy away from making a motion in the appropriate case.

For further information on this topic please contact Robert N Holtzman or Steven M Knecht at Kramer Levin Naftalis & Frankel LLP by telephone (+1 212 715 9100) or by fax (+1 212 715 8000) or by e-mail ([email protected] or [email protected]).