In the United States, employers are free to make employment decisions that reflect their policies and procedures, as long as those decisions are not based on illegal motives and do not disparately impact a particular group of people. Anti-discrimination laws that prohibit workplace discrimination on the basis of protected categories such as race, national origin, sex, disability, and religion do not simultaneously prohibit employers from implementing and adhering to neutral policies that aim to ensure fairness, order, productivity, and financial success. In Nieves v. Envoy Air, Inc., the Sixth Circuit reminds employers of the importance of, and protection that comes with, establishing rules and properly investigating the violation of company policies.

Background

Armando Nieves worked as a gate agent for Envoy Air, an affiliate of American Airlines, for 19 years. As an employee, Nieves participated in American’s employee travel privilege program, which allowed employees and certain eligible individuals related to employees to travel at discounted rates. According to American’s policy, allowing an ineligible individual to use travel benefits subjected the employee to termination. In April 2015, American conducted a travel audit to look for travel privilege abuse. Nieves was randomly selected for the audit and was asked to send proof of eligibility for each traveler that he had listed on his travel privileges log. Although Nieves had listed several individuals on his travel log, he only sent documentation related to his wife and stepdaughter. Based on this information, the auditors put Nieves’ audit in a stack requiring further investigation.

In January 2016, Envoy’s Senior Human Resources/Employee Relations Specialist, Nina Ingalls, contacted Nieves’ general manager, Mitch Felkey (with whom Nieves had a less than great relationship), to coordinate her interview with Nieves. She learned that Nieves was on FMLA leave and had been hospitalized for stage three kidney failure. Nieves returned to work in February 2016, and Ingalls conducted a telephone interview with Nieves and Felkey in March 2016. After questioning Nieves about each entry on his travel log, Ingalls instructed him to provide documentation for each individual listed on his travel log within nine days. Nieves provided insufficient documentation for two travelers (the son of a close friend and his brother-in-law), and no documentation for his stepson, his mother’s partner, and his mother-in-law.

After receiving Nieves’ additional documentation, Ingalls submitted a summary of her investigation to two supervisors. Because several individuals on Nieves’ travel log did not meet the criteria to be eligible travelers, Ingalls and her supervisors agreed that per the policy, he should be terminated. The decision to terminate was reviewed and approved by a three person committee comprised of Envoy’s vice presidents of human resources, finance, and legal. Accordingly, Envoy terminated Nieves for misrepresentation of facts, misrepresentations in obtaining employee benefits or privileges, and abuse of travel privileges. Nieves appealed the termination, but in doing so, admitted that his mother’s partner was not his father and therefore ineligible to travel at discounted rates. Consequently, Envoy upheld the termination decision.

Nieves sued Envoy for wrongful termination, claiming that Envoy violated (1) the FMLA by terminating him in retaliation for using medical leave, (2) the Michigan Persons with Disabilities Civil Rights Act (MPDCRA) by terminating him because of his disability, and (3) the Michigan Elliot-Larsen Civil Rights Act (MELCRA) by terminating him based on his race and ethnicity (Hispanic-American). The district court granted Envoy’s motion for summary judgment on all three claims. Nieves appealed.

Sixth Circuit Affirms Summary Judgment on FMLA Retaliation Claim

On appeal, Nieves attempted to create a number of genuine issues of material fact regarding each of his causes of action. With respect to his FMLA retaliation claim, Nieves first argued that Ingalls’ comment in her notes that Nieves took “frequent FMLA leave” was probative of causation. The Sixth Circuit explained that Ingalls had written a private note to herself that Nieves had “frequent FMLs” because she was trying to schedule an interview with him to finish the audit investigation. The Court held this note did not indicate that Nieves’ FMLA leave was causally connected to his termination.

Next, Nieves asserted that the district court improperly dismissed a comment that Felkey made that Nieves was ill and should retire. Focusing again on the context in which the comment was made, the Sixth Circuit explained that Felkey had simply responded to Nieves’ wife’s overview of Nieves’ health condition. The Sixth Circuit ruled that the district court had correctly concluded that the comment was too ambiguous to support Nieves’ claim that his termination was related to his FMLA leave.

Nieves made a third argument that his travel log received heightened scrutiny, which raised an inference of a causal connection. The Sixth Circuit swiftly dismissed this argument, stating that nothing in the record supported it. (Recall that Nieves was selected randomly for audit and then did not submit requested information.) Finally, Nieves claimed that Felkey’s statement that “if you cannot perform the duty, then we don’t need you here” was evidence of FMLA retaliation. However, Nieves’ own deposition testimony demonstrated that Felkey made this comment to a group of employees one year before Nieves took FMLA leave. Because all of his arguments failed, the Sixth Circuit held that Nieves could not establish a causal connection between his FMLA leave and his termination and his prima facie case of FMLA retaliation failed.

Sixth Circuit Affirms Summary Judgment on Disability Discrimination Claim

Regarding Nieves’ disability claim, the Sixth Circuit held that Nieves failed to show that his disability played a role in Envoy’s decision to terminate him. Nieves argued Felkey’s comments were evidence of disability discrimination, but received the same results: (1) the comment to Nieves’ wife was too ambiguous to support a disability discrimination claim; and (2) the statement to Envoy employees was neither made in a context suggesting that it was aimed at disabled people nor with awareness of Nieves’ alleged disability. Without a prima facie case, Nieves’ disability discrimination claim failed.

Sixth Circuit Affirms Summary Judgment on Race Discrimination Claim

Although the Court found that Nieves established a prima facie case of race discrimination based on Felkey’s actions (e.g., allegedly mocking Nieves’ accent, ignoring claims that other employees were abusing their traveling privileges, and requiring Nieves to perform less desirable work than Caucasian employees), he still could not survive summary judgment because he could not establish pretext. The Sixth Circuit detailed how Nieves failed to demonstrate that Envoy’s legitimate, non-discriminatory reasons for terminating him were pretextual. First, the investigation revealed that Nieves’ conduct violated the travel privilege policies and was grounds for termination. Envoy also presented evidence that it terminated other employees who had abused their traveling privileges. Furthermore, Nieves’ wife’s disclosure that other employees abused their travel privileges was not provided in a way that would have interrupted Envoy’s investigation or exculpated Nieves in any way. Finally, there was no evidence that American’s random audit was a ruse to allow Envoy to treat Nieves, a Hispanic man, differently than other employees.

Learning from Envoy

Envoy provides a comprehensive example of the value of assessing the use of employee benefits, thoroughly investigating potential violations of employee benefit programs, and adhering to a discipline policy that clearly identifies the consequences of any violations. Whenever you must perform an audit or investigate employee conduct, think about the following tips and how they can protect your business:

  1. Disseminate all policies, including those regarding the use of employee benefits and the consequences of violation. Make sure employees understand what type of conduct is prohibited and the disciplinary action that may result from violations of policies. As always, have a paper trail that shows the employee received the policy (which can be a handbook acknowledgement).
  2. Clarify when audits or investigations may occur. Be clear on whether an employee was randomly selected or if his or her behavior triggered it.
  3. Make the investigation transparent. If further investigation is needed, notify those employees that additional information and/or a follow-up meeting is required as soon as the determination is made. To the extent that an employee is on leave or otherwise unavailable for an investigation to begin immediately, note the reason for the delay and begin the investigation within a reasonable time after the employee returns to work.
  4. Document each stage of the investigation. Include dates, times, and summaries of the employee’s actions being investigated and any involved personnel. Document the results of the investigation and the actions to be taken based on those results. If discipline is warranted, specify the policy that has been violated and explain the rationale for the recommended disciplinary action.
  5. Before implementing any disciplinary action, make sure the decision making team is on board. This could mean just having the supervisor and manager agreeing to the result, but it could also mean having human resources, legal (including outside counsel if necessary), and others review and approve the decision.