U.S. Supreme Court Rules in Favor of Employee Rights

Art Business News, August, 2000 by Richard Weatherington

When the U.S. Supreme Court speaks on employment issues, art dealers know it is time to listen. But this time, not only did the Supreme Court speak unanimously, its most recent ruling concerning workplace discrimination was loud and clear: If an art dealer lies about the reason for terminating an employee to cover up discrimination, it will be much easier in the future for the employee to win.

With the number of discrimination lawsuits tripling in the past eight years, art dealers can expect the reason they provide for termination to undergo even greater scrutiny. While the Supreme Court's ruling involved age discrimination, the principles expressed in the decision could be applied equally to other areas of discrimination, such as sex or race.

The Case

The case involved a 57-year-old supervisor whose duties included recording attendance and hours worked by his employees. His boss was a 45-year-old manager who complained that production was down because employees were often absent, late or left early. An audit was conducted and the supervisor was fired after 40 years on the job.

The supervisor filed suit for age discrimination. At trial, the company said he was fired for failure to maintain accurate attendance records. The supervisor claimed that reason was merely a pretext for age discrimination and introduced evidence that he had accurately recorded the attendance and hours. He then produced evidence that the department manager, who wielded "absolute power," was motivated by an age-based animus towards him and was principally responsible for his firing. The jury ruled in favor of the supervisor.

However, on appeal the Fifth Circuit Court of Appeals reversed the judgement. When the case came before the United States Supreme Court, however, things changed in a big way. The Supreme Court determined that the Appeals Court wrongly adopted the premise that the employee must always introduce additional independent evidence of discrimination. It said that when an employee makes a case of discrimination and combines that with sufficient evidence showing that the employer's non-discriminatory reason for the firing was false, the courts may find that combination to be adequate to uphold a claim of liability for age discrimination.

What The Case Means for You

Once a case is established, the burden shifts to the company to produce evidence that someone else was preferred for a legitimate non-discriminatory reason. Once the employer produces sufficient evidence to support a non-discriminatory reason for its decision, the employee must be given an opportunity to prove that the stated legitimate reasons offered by the company were not the real reasons but were a pretext for discrimination. Thus, said the court, an employee may attempt to establish that he was a victim of intentional discrimination by showing that the employer's given reason is unworthy of credence.

Proving that the employer's reason is false, said the Supreme Court, becomes part of the greater task of proving that the real reason was intentional discrimination. In the appropriate circumstances, a trial court can reasonably infer that the employer is camouflaging its discriminatory behavior. Such inference is consistent, said the court, with the general principle that the court is entitled to consider a party's dishonesty about a material fact as "affirmative evidence of guilt." Under this common-sense principle, evidence suggesting that a company accused of illegal discrimination has chosen to give a false reason for its actions gives rise to a rational inference that the company could be masking its illegal motivation. Moreover, once the employers' justification has been eliminated, discrimination may well be the most likely alternative explanation, said the court, especially since the employer is in the best position to put forth the actual reason for its decision.

The Supreme Court, however, did not grant employees a blank check. It noted that proof that the employer's stated reason is false does not necessarily establish that the employee's claim is true.

The Supreme Court concluded that the Court of Appeals had impermissibly substituted its judgement concerning the weight of the evidence for the jury's. Credibility determinations, the weighing of the evidence and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. This ruling means it will be harder for the appeals courts to second -guess jury verdicts in future civil cases.

The court's ruling, in effect, will make it easier for employees to show that they were victims of employment discrimination, even without direct evidence, particularly when an art dealer gives a false reason for the termination. An.

SUMMARY BOX

* Per a new Supreme Court ruling, if an employer lies about the reason for terminating an employee to cover up discrimination, it will be much easier in the future for an employee to win.

* Once a case of discrimination is established, and sufficient evidence is produced that the employer's reason for firing is false, the burden of proof shifts to the employer.