Court Finds That an Employer’s “Shifting” Explanation Can Support a Retaliation Claim

Terminated Employee Gathers His ThingsWhy was an employee fired? Was it the company’s change in business focus that rendered the employee’s skill set obsolete? Was the employee fired for poor performance? Did the employee’s bad attitude get her fired? Or – as often the case – was the employee fired for a combination of reasons? A position statement to the EEOC or a state agency that articulates the employer’s reasons in a poorly worded or ambiguous way can come back to bite the employer on summary judgment. A recent case from the U.S. Court of Appeals for the Second Circuit illustrates how shifting explanations do not look good to a judge or a jury.

In Kwan v. Andalex Group, LLC, a female plaintiff was terminated three weeks after she allegedly complained to a company executive about being treated differently than men concerning salary increases and bonuses. The district court granted summary judgment in favor of the employer on all claims. But the Second Circuit, in a 2-1 decision, reversed on the plaintiff’s retaliation claim. A copy of the Second Circuit’s decision can be found here.

The majority – after parsing the language in the employer’s EEOC position statement – found that the employer initially contended that a change in business focus made the plaintiff’s skill set obsolete, but later “shifted to an explanation that the plaintiff’s poor performance and bad behavior were the reasons for the termination.” On the other hand, the dissenting judge believed that the employer simply offered “complementary justifications” for the employer’s discharge that were part of the same theme and supported the termination decision. The bottom line: the employer now has to settle the case or face a jury trial on the plaintiff’s retaliation claim.

Significantly, the majority reached this holding despite the U.S. Supreme Court’s June 2013 decision adopting the more stringent “but for” standard of causation for retaliation claims – a decision many commentators hailed as a huge victory for employers. The court explained its interpretation of the standard as follows: “‘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.”

While employment law nerds like myself love to debate issues like “but for” causation, the practical lesson for employers is simple: get your story straight and stick to it. Implementing this lesson, however, is not as easy as it sounds when there are multiple justifications and decision-makers involved. From the termination meeting to the EEOC position statement, reaching out to your company’s employment counsel at an early stage can save headaches and more substantial costs down the road. There is simply no substitute for well-crafted, consistent communications about your company’s reasons for a personnel decision.