In Sieden v. Chipotle Mexican Grill, Inc., No. 16-1065 (January 26, 2017), the Eighth Circuit Court of Appeals reiterated its view that an employee fails to establish pretext for an employer’s adverse employment action where the employer noted and counseled the employee for performance issues long before the alleged protected activity occurred. The court affirmed the district court’s grant of summary judgment to the employer, agreeing that the plaintiff had not demonstrated that the employer’s reason for his discharge was pretextual.

Factual Background

Sieden was a manager of several Chipotle restaurants in Minnesota. He began his employment in 2001 and rose through the ranks. By 2011, he had become a “Restaurateur 3,” which was a recognition that he was among the restaurant chain’s best managers and had responsibility for three restaurants. Beginning in 2012, however, Sieden’s managers concluded that his performance had declined, and they removed one restaurant from his responsibility. Sieden claimed that during a meeting in April of 2013, the manager criticized him for hiring too many Hmong employees, and he verbally opposed that statement. Shortly thereafter, they removed a second restaurant from his responsibility due to performance issues. He was discharged one month later.

Sieden sued claiming discrimination under the Minnesota Human Rights Act based on reprisal (retaliation), age discrimination, and sexual orientation discrimination. The district court dismissed the reprisal and sexual orientation claims, and the case went to trial before a jury, which found in favor of Chipotle on the age discrimination claim. Sieden appealed only the judgment on his reprisal claim.

Eighth Circuit’s Analysis

Under Minnesota law, reprisal claims are analyzed under the familiar McDonnell Douglas framework. The court of appeals assumed, without deciding, that Sieden had established a prima facie case, and then moved to consideration of whether he had established pretext. To do so, under circuit precedent Sieden needed to show that the employer’s ‘“explanation is unworthy because it has no basis in fact,’ or that ‘a prohibited reason more likely motivated’ the adverse employment action.”

In an attempt to show that Chipotle’s stated reasons for its actions were pretextual, Sieden cited his past good (or even excellent) performance reviews. In contending that the summary judgment record supports a finding of pretext, Sieden asserted that (1) Chipotle’s complaints about his performance had no basis in fact, (2) he was set up for failure and received increased scrutiny after he defended hiring Hmong individuals, (3) the stated reason for discharge shifted during the course of the litigation, (4) Chipotle failed to follow its own disciplinary policies, and (5) Chipotle’s complaints about his job performance were purely subjective. The court of appeals rejected all of these arguments.

The Eighth Circuit panel, in an opinion by District Judge Leonard Strand, sitting by designation, noted that Sieden’s performance issues had been brought to his attention by Chipotle management more than a year before his discharge. The employer’s concerns regarding Sieden’s performance continued for many months until he was relieved of his responsibilities for all but one of the three stores he had managed previously. Further, Sieden had acknowledged his poor performance regarding one store and accepted responsibility for it.

The court of appeals addressed several points that are frequently raised in reprisal and retaliation cases. First, Sieden pointed to his prior favorable reviews as evidence of pretext. In response, the court said that an employer was entitled to rely on more recent performance reviews when taking disciplinary action. Second, Sieden claimed that he was subjected to greater scrutiny after he objected to his manager’s comment in May of 2013, but the court said that Chipotle had found his performance wanting both before and after that discussion. Third, Sieden claimed that Chipotle’s reasons had shifted during the course of the litigation, but Judge Strand, writing for the court, found that Chipotle’s reasons, while stated at greater length in the litigation, had not been inconsistent. “A plaintiff claiming shifting explanations to support pretext must show that the reasons are completely different, not minor discrepancies,” the court said.

Finally, Sieden challenged Chipotle’s reasons for his discharge on the ground that they were largely subjective. Acknowledging that it has in the past cautioned against reliance on subjective reasons because they can easily be fabricated, in this case the court found that there was ample objective evidence to support the employer’s actions. “Here, while Chipotle’s explanation for discharge is based largely on subjective factors, the record demonstrates that Chipotle’s concerns existed long before Sieden’s protected activity, indicating that they were not fabricated to conceal a retaliatory animus,” the Court said.

Key Takeaways

This case is another in a line of Eighth Circuit decisions that place emphasis on the existence of employee performance issues that have been documented prior to the employee engaging in any arguably protected activity. It is important to recognize that an employer’s reliance on subjective factors is not a fatal flaw in a discharge case. Lastly, this case can serve as a reminder to employers that documenting employee performance issues and taking prompt action to correct those deficiencies may be the best defense against a later claim of retaliation, particularly in an age when employees frequently assert reprisal claims following negative performance appraisals.