June 10, 2014

50 for 50: Five Decades of the Most Important Discrimination Law Developments

Number 30: An Employer’s Honest Belief A Surefire Defense?  Not Always 

Proving discrimination – or the absence of it – is a tricky proposition at its core and there can be more twists and turns than a roller coaster.  What happens when an employee is fired for both legitimate and discriminatory reasons?  What about when an employee is fired for purely discriminatory reasons but an employer learns about serious misconduct after the fact?  Over time, the courts found answers to these perplexing questions.  Here is another one that is still largely unanswered:  what if an employer fires an employee for honest, but incorrect reasons?  Many courts have found that when an employer’s reason for firing an employee is untrue that is enough to create an inference that the real reason was discriminatory.

But, the so-called honest belief doctrine provides a potential escape for the employer, as it focuses not on the accuracy of the underlying facts of an employer’s decision, but rather on what the decision-maker in question honestly believed the facts to be and whether that belief provides a legitimate, non-discriminatory reason for his or her adverse employment action.  Some jurisdictions have embraced the doctrine.  For example, in Reilly v. Lehigh Valley Hospital (3rd Cir. 2013), an applicant for a security-officer position at a hospital was asked on a job application whether he had ever been diagnosed with or treated for alcoholism or drug addiction.  He answered no, and received the position.  In reality, the employee had been treated for both drug and alcohol addiction.  However, he honestly believed that he had answered the questions truthfully because “no change occurred in his substance abuse behavior” and his time in treatment was to fulfill a requirement of the state. Eventually, the hospital discovered the employee’s history of drug and alcohol treatment and terminated him for lying on his application.  The Third Circuit relied on the honest belief doctrine in upholding the employer’s decision, stating that, “[Employee’s] belief that he answered the pertinent inquiries truthfully is not the determinative factor.  The question is whether the decision maker . . . could regard [employee’s] responses as dishonest. The answer to that question is resoundingly, ‘yes.’”  The Court ultimately granted summary judgment in the employer’s favor.

However, other jurisdictions have rejected the idea that, “so long as the employer honestly believed in the proffered reason, an employee cannot prove pretext even if the employer’s reason in the end is shown to be ‘mistaken, foolish, trivial, or baseless.” Kariotis v. Navistar Int’l Transp. Corp., 131 F.3d 672, 676 (7th Cir. 1997).  Instead, the Sixth Circuit has adopted modified honest belief approach.  Under the Sixth Circuit, as articulated in Wright v. Murray Guard, Inc., 455 F.3d 702, 708 (6th Cir. 2006), the most important inquiry is “whether the employer made a reasonably informed and considered decision before taking the adverse employment action.”  The Court noted that it would not “blindly assume that an employer’s decision of its reasons is honest.”  Therefore, under this standard, when an employee is able to produce sufficient evidence to establish that the employer failed to make a reasonably informed and considered decision before taking its adverse employment action, any reliance placed by the employer on their process cannot be considered an honest belief defense.  Similarly, a California Court of Appeals rejected the honest belief defense in Richey v. AutoNation, Inc., 210 Cal. App. 4th 1516 (Cal. 2012), but that decision is currently under review by the California Supreme Court.

The take away from these cases that is that the honest belief defense is ever evolving, and establishing this type of defense will not always be easy for employers.  Therefore, if an employee is terminated based on poor work performance or some other reason, the employer should document the employee’s problems throughout their work history, and be prepared to rely on this documentation if they wish to ultimately prevail against employee’s claims.

Category: EEO,