Second Circuit Emphasizes That Inconsistent Reasons For Employee Termination Can Be Sufficient To Overcome Summary Judgment

Kwan v. The Andalex Group LLC, No. 12-2493 (2d Cir. Dec. 16, 2013): A recent decision by the Second Circuit not only revived a former employee’s retaliation claims but further highlighted the litigation risk when an employer’s explanation for an employee’s firing evolves over time. In Kwan, the Second Circuit held that an employer’s shifting explanations for why it discharged an employee, along with the very close temporal proximity between the employee’s protected conduct and termination, were sufficient to create a triable issue of fact with regard to whether the employee’s protected conduct was a but-for cause of her termination.

Zann Kwan sued The Andalax Group, a family-owned real estate management firm, for, inter alia, retaliation under Title VII of the Civil Rights Act, when her employment was terminated three weeks after she allegedly complained to a superior that she had been discriminated against because of her gender. Although Andalax denied that Kwan’s alleged complaint of gender discrimination ever occurred, its explanations for her termination allegedly shifted over time. The company’s initial position—memorialized in letters from its counsel, and in the position statement it filed with the Equal Employment Opportunity Commission—was that Kwan was terminated because a shift in business focus had rendered her skill set obsolete. During discovery, however, one of Andalax’s principals testified that the company’s shift in business focus predated Kwan’s termination, and another testified that Kwan was discharged for poor performance. In its summary judgment papers, Andalax alleged that Kwan’s poor performance was the chief reason for her termination. 

The Southern District of New York issued summary judgment in favor of Andalax because Kwan failed to establish a prima facie case of retaliation. However, the Second Circuit reversed, holding that Andalax’s inconsistent explanations for firing Kwan, along with the temporal proximity of Kwan’s alleged complaint and her termination, were sufficient to defeat summary judgment. In explaining its reasoning, the Second Circuit noted that, under the U.S. Supreme Court’s recent decision in Univ. of Texas Southwestern Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2013), “but-for” causation does not require proof that retaliation was the only cause of the employer’s action, but only that the adverse action would not have occurred in the absence of the retaliatory motive. The Second Circuit found that, based on Andalax’s alleged shifting and inconsistent explanations for Kwan’s termination, a reasonable juror could infer that Andalax’s explanation was pretextual, and that, in light of the temporal proximity of Kwan’s complaint and the termination, Kwan’s complaint was a but-for cause of her termination. This decision is an important reminder that variance in an employer’s reasoning for firing an employee may be sufficient to overcome summary judgment on a retaliation or discrimination claim.

Note: This article was published in the January 2014 issue of the New York eAuthority.