The Ninth Circuit Court of Appeals recently upheld judgment in favor of an employer on a former employee’s retaliation and wrongful discharge claims, ruling that the employer’s internal dispute resolution program did not prevent the employer from terminating the employee. In full disclosure, I represented the employer in this case and with my client’s approval, offer this insight into how we obtained this favorable outcome.

Account Executive Fired For Poor Performance and Missed Meetings

Jill Doran-Slevin (Doran-Slevin) began working for United Parcel Service (UPS) as an account executive in late 2010. Despite being assigned thousands of accounts, Doran-Slevin quickly began falling behind in her sales plan results. She also failed to adequately follow-up and serve her customers. In her 2011 performance review, Doran-Slevin was informed she needed to significantly improve her performance.

In early 2012, Doran-Slevin’s new area manager as well as human resources personnel worked with her to create a goal-setting matrix to help her improve her performance. UPS scheduled multiple meetings to discuss the matrix with Doran-Slevin, but she had a series of excuses for not attending the meetings.

During that time, Doran-Slevin composed two letters in which she alleged that she “was the target of discriminatory practices involving [her] gender [and] age.” She sent the first letter to UPS and the second to the EEOC. She did not, however, notify UPS that she had sent her allegations to the EEOC.

Upon receipt of Doran-Slevin’s letter, the company began investigating her allegations. While the investigation was ongoing, Doran-Slevin met with her managers to discuss a revised goal-setting matrix which she signed. Although UPS thought that the meeting had been positive and productive, Doran-Slevin stopped coming to work. For three days, she failed to show up for work or answer her phone. When Doran-Slevin finally called in and met with UPS managers, she indicated that she was interested in leaving with a severance package. UPS scheduled a follow-up meeting in order to discuss possible severance, but after Doran-Slevin failed to show up or answer her phone at the meeting time, UPS terminated her employment.

Employee Failed To Utilize Employee Dispute Resolution Program

UPS has an Employee Dispute Resolution (EDR) process that outlines a five-step internal grievance procedure. It begins with an informal open door step, followed by more formal dispute reviews, up to and including voluntary arbitration. Importantly, however, nothing in the EDR policy prohibits UPS from imposing discipline, including termination, while the internal dispute process proceeds.

At the time of her termination, UPS informed Doran-Slevin that she could use the EDR process if she wished. In addition, when it sent her a formal termination letter, UPS enclosed a brochure explaining the EDR process. Doran-Slevin admitted at trial that she did not try to initiate the EDR process with respect to her termination.

Former Employee Sues On Multiple Claims

Doran-Slevin pursued multiple claims against UPS, including retaliation under federal and state anti-discrimination laws based on her filing an EEOC complaint and wrongful discharge under Montana’s Wrongful Discharge From Employment Act.

The case proceeded to a jury trial in federal court in Montana. After many days of testimony, the district court granted judgment as a matter of law in UPS’s favor on Doran-Slevin’s retaliation and wrongful discharge claims. The court allowed Doran-Slevin’s claim for lack of good cause for termination to go to the jury, which returned a unanimous verdict in UPS’s favor. Doran-Slevin appealed to the Ninth Circuit Court of Appeals on multiple grounds, including the grant of judgment as a matter of law in favor of UPS.

Appellate Court Upholds Judgment In Favor of Employer

After considering the written positions of both sides as well as asking questions during oral argument, a three-judge panel of the Ninth Circuit affirmed the district court’s ruling. The Ninth Circuit stated that no reasonable juror could have determined that UPS terminated Doran-Slevin based on her filing of an EEOC claim because it was undisputed that UPS did not learn about the EEOC complaint prior to terminating Doran-Slevin. The Court also rejected Doran-Slevin’s wrongful discharge claims, finding in part that Doran-Slevin had not triggered application of UPS’s EDR program and additionally, the EDR program did not prohibit UPS from terminating Doran-Slevin. The Court upheld judgment in favor of UPS.

Take Aways For Employers

Litigation is rarely a pleasant experience, but achieving a court victory based on sound employment practices can make it worthwhile. Of course this case is unique on its facts and cannot guarantee the outcome of future cases, but some useful best practices regarding terminations may be gleaned from it, including the following:

  • Review employment laws of the state where the employee resides/works prior to making a termination decision. This case arose in Montana which has a unique wrongful discharge statute. An employer who relies on an employee’s at-will status when implementing a termination decision may well be out of luck in a state like Montana, so state-specific differences should be reviewed prior to making employment decisions.
  • Use disclaimers and disavow contractual obligations in your policies. By specifically stating that your handbook or other policies do not constitute a contract between the employee and the company, you may help eliminate claims that you breached your obligation to follow any particular steps prior to terminating employees.
  • If you use an internal dispute resolution process, reserve the company’s right to discipline or terminate employees for legitimate business reasons even while the process is ongoing. Similarly, if you use a progressive discipline policy, make sure that it states that the company may skip steps and escalate to immediate termination should the company deem it necessary.

By taking the time to get your policies and documentation in order and evaluating any risks prior to making a termination decision, you will increase your chances of prevailing should the employee file a claim against your organization.