Utah Employment Law Letter - June 2014
In 1902, Beatrix Potter published “The Tale of Peter Rabbit.” It was an unexpected success, and by the time she passed away, she had published 23 books and secured for herself both a handsome income and a place in the history books. Before taking up children’s literature, however, fired by an interest in science and natural history, Potter had unsuccessfully applied to become a student at the Royal Botanic Gardens at Kew. The reason she was turned away? She was a woman.
More than 100 years later, another woman named Potter began working in a traditionally male-dominated field. Read on to learn about the steps employers can take to ensure that traditions, whether they’re conscious or unconscious, don’t become a stumbling block.
A stellar salesperson
In 2004, Synerlink Corporation, a company that sells electrical products for the electrical utility market, hired Stacey Potter to work as a territory manager (TM) for the Oklahoma area. She took over the position, which included a significant portion of the preexisting customer accounts in Oklahoma and the Texas panhandle, when Synerlink promoted the previous TM, Jim Tarpley, to company president. As a TM, Potter worked closely with Tarpley and her supervisor, Earl Reynolds.
When Potter was hired, she became Synerlink’s only female TM. She told Tarpley that she knew she “would have to [be] better than a man to be accepted, or even to be treated civilly by the ‘good ol’ boys’” that made up Synerlink’s customer base. She quickly became a top salesperson. In 2006, Synerlink’s CEO, Steve Roberson, sent an e-mail to other TMs in which he praised her efforts, intelligence, and unselfishness and called her “the ultimate ‘Team Player.’”
In November 2006, Synerlink created a new North Texas territory and offered the TM position to Potter because she had mentioned that she would like to return to Texas, her home state. She refused the offer, however. According to her, despite her rejection of the offer, Tarpley and Reynolds promised that she could keep the Oklahoma territory “as is.”
Synerlink hired Gary Dutton as the new North Texas TM. In accordance with its general practice when creating a new territory, Synerlink asked various TMs, including Potter, to transfer some of their accounts to Dutton. Potter refused, sending an e-mail on December 18, 2006, in which she referred to the promise that she could keep the Oklahoma territory “as is.”
In December 2006, Potter “swept” the awards handed out at Synerlink’s awards banquet. She became the first woman to receive Synerlink’s “Mrs. Gross Profit” award, which had previously been known as the “Mr. Gross Profit” award.
According to Potter, at about this time, Tarpley and Reynolds told other TMs that “[Stacey] is an aggressive salesperson[;] she’s done a great job. In fact she’s so aggressive, it sometimes scares the hell out of us.” It was Potter’s opinion that she “had kind of outshined some people and they were, maybe, had their egos hurt over it. You know, kind of a girl beating everybody out.”
In April 2007, Dutton’s territory lost a manufacturer. Again, Reynolds asked Potter to review her accounts and see if she could transfer some to Dutton. Her written response included the following: “Here is how I see this: I work hard to make this territory a strong and profitable one for the company, for our manufacturers, and for myself. . . Now, I can look forward to being rewarded for my efforts by being penalized with a potential territory reduction and commission cut because a new salesman was hired prematurely? . . . I am not in favor of handing over pieces of my territory just because the decision to hire him may have been a gamble.”
In early June 2007, after Synerlink changed a company policy regarding TMs’ authority to oversee buy/resell representatives and after she had a conflict with one of those representatives, Potter sent an e-mail to Tarpley in which she asked: “Did you or did you not tell [the buy/resell representative] that I would be responsible for setting margins and selling prices for [this customer]? You said you told him so why would he do this? Is he deaf or just stupid?”
Tarpley’s e-mail response to Potter included the following: “When I tell you something[,] . . . you can ‘take it to the bank’. . . However, no territory manager owns a territory or a customer; People . . . have flourished because they have willingly given up customers and income for the good of the team.”
On June 9, 2007, Potter responded with a lengthy e-mail. Among other things, she told Tarpley, “I sense some continuing animosity on your part about my unwillingness to give up accounts. I want to be viewed as a team player and a producer and I thought I had been, and strive to be each day. If you do not share this view, let’s resolve it. . . . You say [others] have flourished because of the sacrifices they made? You said they have been rewarded. No one has talked to me about the rewards, just the sacrifice.”
In an effort to reach an agreement over the scope of the requested changes, Potter also suggested a meeting with Dutton, Reynolds, and Tarpley. She said, “If I’m forced to waive [sic] a white flag to prove I’m a team player and help my fellow TM, I will consider doing it. However, before we try to make any new changes, consider if it really makes sense. . . Somehow, I’m betting the answer is ‘no.’”
In closing, Potter stated: “As much as I love it here and often feel like I get ‘buy in’ on certain things, I’m not stupid—I know at the end of the day, I’m not on the board of directors, I’m not the CEO, I’m not family, and my request or opinion means virtually nothing. I don’t have any problem participating in a fair request, when it’s fair to all and carried out equally among my peers in the same situation. You, Earl and Steve said I earned a right to keep this territory just as I chose to keep it, once again—telling me it was my decision. So, why get upset and, in your words, disappointed, with me when I make that decision? I’m disappointed when I’m told one thing but something else happens.”
According to Tarpley, that e-mail was “the last straw.” He met with Potter on June 14. She tape-recorded their conversation, during which Tarpley gave her the option of resigning or being terminated, stating, “It’s very hard when someone’s unhappy to go forward[,] and based on your opinions that you’ve expressed[,] it’s obvious that you are unhappy and things aren’t working out. . . I don’t see any other way based on the opinions you’ve expressed.” Potter refused to resign and was terminated.
Potter takes it to court
Potter sued Synerlink in federal district court, alleging, among other things, sex discrimination in violation of Title VII of the Civil Rights Act of 1964. Tarpley testified that Synerlink’s reason for terminating her was “based on [her] ongoing failure to work as a team player, an issue which culminated in a series of combative e-mails [she] sent . . . to me and other members of management in June of 2007.”
During the discovery phase of the litigation (the exchange of relevant evidence), Synerlink produced Tarpley’s handwritten notes from his meetings with Potter and other employees. At deposition, he testified that the documents were originals. However, Potter hired an expert who determined that the notes were not originals.
Potter redeposed Tarpley, who admitted that the documents were copies and that he had destroyed the originals. He testified that was his usual practice and he considered the copied notes his originals at the time of his first deposition.
During discovery, Potter also obtained testimony from two male TMs, Jason Irons and Johnny Hopkins. Among other things, Irons testified that he had “butt[ed] heads,” “talk[ed] things out,” and “ask[ed] a lot of questions” in circumstances similar to Potter’s. Hopkins testified that when changes had been made to his territory, he had expressed concerns. Synerlink didn’t terminate either Irons or Hopkins, however.
Potter claimed that Synerlink fired her in violation of Title VII because she violated established gender stereotypes, arguing “[the company] did not fire male TMs for ‘butting heads’ with management, but she was fired for doing so because she is female.” The trial court granted Synerlink summary judgment on the claim.
In other words, the trial court decided that no trial was necessary because, despite giving Potter the benefit of any doubt, the evidence clearly showed that no illegal sex discrimination had occurred. Potter appealed the decision to the U.S. 10th Circuit Court of Appeals in Denver (whose rulings apply to Utah employers as well as employers in Oklahoma).
Summary judgment reversed
The 10th Circuit didn’t agree with the trial court, which had overlooked evidence showing that gender may have been the reason for Potter’s termination.
For purposes of the appeal, Synerlink acknowledged that Potter was part of a protected class, an adverse employment action had been taken against her, and the evidence raised an inference of illegal discrimination. Potter, likewise, admitted for purposes of the appeal that Synerlink’s stated reason for firing her—i.e., her failure to be a team player—was a legitimate nondiscriminatory reason for firing her. Thus, because there was no direct evidence of sex discrimination (e.g., a statement from Tarpley or Reynolds that Potter should be terminated because she is a woman), the success of Potter’s Title VII claim hinged on whether she could show that Synerlink’s stated reason for firing her was a pretext, or excuse, for illegal discrimination.
Potter pointed to three things that she believed showed pretext:
Synerlink did not fire male TMs who expressed dissatisfaction.
Tarpley’s testimony about why Synerlink fired her had little credibility because he had lied about his notes under oath.
There was a general culture of discrimination.
Although the trial court rejected those arguments, the 10th Circuit decided there was evidence that could be used to support the first two assertions.
First, the 10th Circuit said that Irons’ and Hopkins’ testimony raised a legitimate question regarding whether Synerlink treated dissatisfied female TMs differently from dissatisfied male TMs. According to the 10th Circuit, “Tarpley had actually invited . . . Potter to share her concerns, but unlike the male TMs, he fired her when she did so.”
And second, “the fact [that] . . . Tarpley misrepresented the nature of his notes concerning his counseling sessions with . . . Potter undermines the credibility of his stated reason to fire her and therefore raises a genuine issue as to pretext.” Accordingly, the 10th Circuit reversed the trial court’s summary judgment ruling and sent the matter back for a trial. Potter v. Synerlink Corp., 2014 WL 1562163 (10th Cir.).
The 10th Circuit’s decision cannot, and should not, be read to mean that Synerlink actually discriminated against Potter. What it means is that (1) there is evidence that may show Synerlink violated the law and (2) instead of granting summary judgment, the trial court should have allowed the case to proceed to trial. As of the writing of this article, this dispute’s ultimate outcome is unknown.
Nevertheless, there are lessons that employers can glean from Potter’s predicament. Perhaps the most tangible lessons involve Tarpley’s notes and deposition testimony. Disciplinary and employee counseling records should be retained in accordance with applicable document retention laws. Although duplicates and further amendments aren’t inappropriate, they should be treated as additions, not replacements. Furthermore, when under oath, employer representatives should be scrupulously accurate in their testimony about their notes. It is wise to be honest.
Less tangibly, employers—particularly those in traditionally male-dominated fields—should be conscious of how they treat similarly situated male and female employees. Strive to ensure that disciplinary actions are meted out fairly, efficiently, and uniformly. And that applies not only to issues of sex discrimination but also to issues of race, color, national origin, religion, and alienage bias. If not, you may be stuck with only your wishes that things will get better, kind of like Peter Rabbit hiding in a watering can in Mr. McGregor’s garden.