This article originally appeared in Law360 and is republished here with permission.

What happens when an employer’s allegedly good documentation of an employee’s poor performance is met with an employee’s allegations that she was subjected to multiple racially charged comments in a two-month period? A reality check for employers that they may still face liability for unlawful employment practices even if they have legitimate, nondiscriminatory reasons for terminating an employee which the employee cannot show were pretextual.

Case Summary

In Smelter v. Southern Homecare Services Inc.,[1] the employee was the sole black worker at one of the employer’s branch offices. According to the court’s opinion, after her hire, she began having performance issues and was given a written warning after one such performance-related incident. For her part, the employee admitted that she “struggled with her job duties.”

Nevertheless, the employee alleged that, after her hire, she was subjected to racial discrimination “nearly every day,” including racial comments. She alleged the comments by her coworkers pertained to, among other things, President Obama’s and the employee’s appearance, the work ethic of black men, and the desire to send black people to Africa. While the parties disputed the veracity of these allegations,[2] the employee did not dispute that she did not report any of these comments to her supervisor until the day of her termination.

On that day, the employee again exhibited a performance issue similar to one about which she had been warned earlier. She then got into a verbal altercation with a coworker who disagreed with the employee’s explanation of the performance issue. After telling the employee to leave her office several times, the coworker finally “hit the desk,” yelled at the employee, and called the employee “dumb” and a derogatory and racially charged name.

The employee’s supervisor spoke with the employee and her coworker in turn. The parties disputed whether the employee told her supervisor about the various racial comments during that meeting. At the end of the meetings, the employer terminated the employee for poor performance and for “yelling in the office.”

The employee brought claims for hostile work environment, discriminatory termination and retaliation. The employer moved for summary judgment, and the district court granted it as to all claims. The Eleventh Circuit affirmed the district court’s grant of summary judgment on all claims, except the hostile work environment claim.

Hostile Work Environment Claims

The Eleventh Circuit first determined that the employee had created fact issues on her hostile work environment claim. To survive summary judgment on a race-based hostile work environment claim in the Eleventh Circuit, the employee was required to show a fact issue on one or more of the following elements: (1) she belongs to a protected class; (2) she was subjected to unwelcome harassment; (3) the harassment was based on her race; (4) the harassment was sufficiently severe or pervasive to alter the terms of her employment and create a discriminatorily abusive working environment; and (5) the employer is responsible for the environment under a theory of vicarious or direct liability. Only the fourth and fifth elements were at issue in Smelter.

Fourth Element (Sufficiently Severe or Pervasive)

The sufficiently severe or pervasive element has both objective and subject components, and for the objective component, the Eleventh Circuit looks at the following factors: “(1) the frequency of the conduct; (2) the severity of the conduct; (3) whether the conduct is physically threatening or humiliating, or a mere offensive utterance; and (4) whether the conduct unreasonably interferes with the employee’s job performance.” Notably, the court found that the employee’s failure to report the comments or harassment until the day of her termination was not dispositive of whether she subjectively felt her workplace was hostile; that eight examples of racist remarks over a two-month period were sufficiently frequent and humiliating to support a hostile work environment claim; and that the employee’s failure to offer any evidence that the harassment unreasonably interfered with her job performance was not dispositive of the objective component of her claim. The court also observed, with respect to the second factor, that a single use of a derogatory and racially charged slur aimed at black people in the workplace was “particularly egregious when directed toward a person in an offensive or humiliating manner.”

Fifth Element (Notice to Employer)

To survive summary judgment on the fifth element of the hostile work environment claim where the alleged harasser is a coworker, the employee was required to show that the employer “knew or should have known of the harassing conduct but failed to take prompt remedial action.” With respect to that showing, the employee argued that her supervisor thought some of the racial comments were “funny.” This was enough to create a fact issue on whether the employer had notice, despite the undisputed fact that the employee did not report the comments until the day of her termination. Accordingly, the Eleventh Circuit reversed the district court’s grant of summary judgment on the hostile work environment claim because the employee had created fact issues on the fourth and fifth elements.

Discrimination and Retaliation Claims

The same cannot be said for the employee’s discriminatory termination and retaliation claims. For both claims, the Eleventh and other circuits deploy the well-known McDonnell Douglas burden-shifting framework.[3] In order to survive summary judgment under this analysis, the employee must establish a prima facie case of her discrimination and retaliation claims. If she accomplishes this, the burden switches to the employer to articulate a legitimate, nondiscriminatory reason for her termination. If the employer meets its burden, the employee must then show this alleged reason was merely a pretext for unlawful discrimination.

In relevant part, the employer in Smelter stated that it terminated the employee because she was a poor performer and was involved in an altercation with a coworker on the day of her termination. The employee took issue with these legitimate, nondiscriminatory reasons, arguing that she was not trained properly (meaning her poor performance was not her fault) and that similarly situated employees outside her protected class were treated more favorably than she was. The Eleventh Circuit rejected her arguments.

First, it found that the evidence showed that the employer “went to great lengths to provide [the employee] with the resources she needed to succeed.” The court noted that “had [the employee] provided evidence that [the employer] intentionally undermined her ability to perform,” then her argument might have carried more weight. That did not occur.

Second, the court discredited the employee’s evidence regarding “comparators,” who she claimed were also poor performers but were not terminated, because they were “never accused of instigating an altercation with a coworker.” That is, the court noted the fact that the employee engaged in “additional misconduct,” besides just poor performance. Accordingly, because she could not establish pretext, the employee did not meet her burden to survive summary judgment on either of her other claims.

Takeaways for Employers

Train Your Supervisors

Part of what the Eleventh Circuit reasoned in Smelter was that because the employee alleged that her supervisor thought certain racial comments were “funny,” the employer had notice that the comments were taking place. While the supervisor denied this, the court’s reasoning is a good reminder that supervisors should be trained, and then reminded at regular intervals, on how to handle inappropriate workplace comments. It’s not a matter of checking a box or making sure everyone acts right when the protected class is around; it’s a matter of making sure the training works so that equal employment opportunity policies and procedures are followed.

Treat All Harassing or Racial Comments Seriously

In that regard, the Eleventh Circuit in Smelter “strongly disagree[d]” with the employer’s assertion that a coworker’s “one-time use” of the highly derogatory and racially charged comment was insufficient to support a hostile work environment claim. Courts across the country are taking harassing or racial comments more seriously, and so should employers in dealing with them following investigations. This means that employer may have to make tough business decisions about employees who have otherwise good performance or behavior records on paper but make inappropriate comments in the workplace. Those tough decisions could mean the difference between avoiding an employment discrimination or harassment claim and getting dinged by a judge or jury.

Investigate and Remediate

Because the supervisor in Smelter denied that the employee complained of any discriminatory comments, no investigation or remedial action apparently took place. Setting aside the fact issue on this point in Smelter, it is a good reminder that investigations are an important part of not only a solid equal employment opportunity, or EEO, policy but also of an employer’s defense against employment discrimination or harassment claims. Investigations should be adequate and coupled with appropriate remedial actions, if necessary. Even though some courts don’t necessarily take issue with a flawed investigation itself as a legal matter, a jury could potentially find that a flawed investigation cuts against a company’s credibility, especially if it is coupled with a failure to reasonably prevent future harassment.[4] Thus, a failure to investigate and remediate may collectively form the nail in the employment litigation coffin.

Document, Document, Document

The employer in Smelter skirted a potentially worse legal outcome because it could demonstrate that it had legitimate, nondiscriminatory reasons for terminating the employee, including various instances of performance training provided to the employee and a written warning following a performance issue. Well-meaning managers and supervisors sometimes say that they prefer to just have a face-to-face meeting to discuss performance issues, rather than write-up an underperforming employee. But there are few things harder for corporate representatives to do in employment litigation depositions than to sit across from a plaintiff’s attorney and defend a termination for performance without back-up documentation. Supervisors should perform thoughtful and honest performance evaluations in writing, and issue write-ups for performance or other workplace behavior issues whenever appropriate. All of that documentation should then be placed and maintained in the employee’s personnel file. This documentation can save an employer in litigation because courts often hold that an employee cannot defeat a legitimate, nondiscriminatory reason for termination merely by questioning the employer’s assessment of his or her performance or ultimate business decision.[5]

Conclusion

At the end of the day, Smelter demonstrates that employers may still face liability, even if they have a legitimate, nondiscriminatory reason to terminate an employee that the employee cannot show was pretextual. But employers can limit their exposure by providing proper training to their staff (especially harassment training to supervisors), documenting employee performance issues honestly and accurately, and investigating and remediating all complaints of discrimination or harassment (even if they appear to be one-off occurrences).

[1] No. 16-16607, 904 F.3d 1276, 1280 (11th Cir. Sept. 24, 2018).

[2] In the court of appeals’ summary judgment review, it was required to construe facts in favor of the employee. Id. at 1284.

[3] McDonnell Douglas Corp. v. Green , 411 U.S. 792, 802-04 (1973).

[4] See, e.g., [5] See, e.g., LeMaire v. Louisiana , 480 F.3d 383, 391 (5th Cir. 2007) (stating that “[s]imply disputing the underlying facts of an employer's decision is not sufficient to create an issue of pretext”); Moore v. Sears, Roebuck & Co. , 683 F.2d 1321, 1323 (11th Cir. 1982) (noting that it is “well settled that the fact finder need not determine that the employer was correct in its assessment of the employee’s performance; it need only determine that the defendant in good faith believed plaintiff’s performance to be unsatisfactory and that the asserted reason for the discharge is therefore not a mere pretext for discrimination”); Kephart v. Institute of Gas Technology , 630 F.2d 1217, 1223 (7th Cir. 1980), cert. denied, 450 U.S. 959 (1981) (stating that “[t]he question before the court is not whether the company’s methods were sound, or whether [its decision was] an error of business judgment ... the court will not inquire into [Defendant’s] method of conducting its business.”).