In Kwan v. Andalex Group, LLC, the Second Circuit (covering New York, Connecticut and Vermont) considered the impact of prior inconsistent statements made in the employer’s Equal Employment Opportunity Commission (“EEOC”) position statement on pending civil litigation.
Kwan worked at Andalex from April 2007 to September 2008. During her employment, she was told that her work product was good and she received a bonus at the end of 2007. On September 3, 2008, she allegedly complained to a company executive that she felt she was being discriminated against based on her gender, as evidenced by the higher compensation of her male peers. Three weeks later, she was terminated for leaving work early without permission.
Kwan filed a complaint with the EEOC. In its position statement responding to her complaint, Andalex claimed it terminated her because of a shift in business focus such that her skill set no longer matched its business needs. Andalex also stated that a male employee was terminated around the same time as Kwan for the same reason. Although Andalex acknowledged that her performance was “acceptable,” it mentioned that she made significant errors on multiple occasions and that such errors had negatively impacted a transaction on at least one occasion. Further, Andalex claimed that Kwan behaved inappropriately on two occasions and did not respect normal working hours (i.e., took long lunches, arrived late, and left early). Despite these ancillary issues, however, the focus of the position statement was that Andalex terminated Kwan because of a shift in business focus.
Yet, in discovery in the subsequent civil action, Andalex shifted its explanation for terminating Kwan. Instead of a change in business focus, Andalex emphasized Kwan’s poor performance and behavior. Indeed, Kwan’s supervisor testified that the business focus had already shifted by the time Kwan joined the company. The supervisor also confirmed that although the other male employee who was terminated around the same time as Kwan was fired because of the shifting business model, Kwan was not. A different executive testified that Kwan was terminated for poor performance and the change in the business model.
In litigation and motion practice, Andalex alleged that the main reason Kwan was terminated was poor performance based on three specific incidents, all involving delay in preparing and/or errors in financial models, only one of which was mentioned at all in its EEOC position statement. Andalex also claimed that Kwan’s behavior — acting inappropriately at business meetings and failing to maintain standard work hours — contributed to the termination decision. The trial court ultimately granted summary judgment in favor of Andalex on Kwan’s retaliation claim.
The Second Circuit, however, reversed summary judgment, holding that Andalex’s inconsistent statements about Kwan’s termination (in its EEOC position statement and in litigation) and the three-week timeframe between her alleged discrimination complaint and termination were enough to survive summary judgment. This case demonstrates the importance of administrative agency investigations and submissions, and the need for such submissions to be carefully prepared and consistent over time.