Company Faces Trial after Changing Explanation for Firing

Kiss Your Retaliation Suit Hello

When an employee brings a lawsuit alleging that his employer retaliated or discriminated against him, courts typically assess the claim by using a burden-shifting approach. Under this approach, after the employer offers a “legitimate, nondiscriminatory reason” for its actions, the employee has to come forward with evidence showing that the reason was pretextual.

The recent decision in Stephenson v. Potterfield Group LLC serves as an example of how an employee can meet this burden.

The plaintiff, Dennis Stephenson, was the Director of Facilities for Potterfield Group. He was diagnosed with prostate cancer and leukemia and took medical leave in 2013 and 2015.

During Stephenson’s second leave, some Potterfield employees accused him of inappropriate conduct, including making “kissing face” gestures. Stephenson returned to work, only to be confronted by his boss, who told him that his position was being eliminated and that he could stay on for another month if he signed a severance agreement.

Stephenson refused and was fired the next day.

Stephenson then sued in federal court, alleging that Potterfield had retaliated against him for using leave under the Family and Medical Leave Act (FMLA). Potterfield argued that it had “alternative, nondiscriminatory reasons” for the firing: specifically, Stephenson’s “conduct towards female employees, and questions surrounding his loyalty to Potterfield Group and the Potterfield family.” But it admitted that its CEO had already told Stephenson that his position was being eliminated.

Under the governing law, “[s]ubstantial changes over time in the employer’s proffered reason for its employment decision [would] support a finding of pretext.” Potterfield’s shift from “eliminating a position to terminating an employee for misconduct” was enough for the court to find an inference of pretext—and deny Potterfield’s motion for summary judgment on Stephenson’s retaliation claim—meaning that the claim would proceed to trial. The court also noted that Potterfield had “deviated from its established policy” in addressing Stephenson’s alleged misconduct, because it didn’t give him a chance to explain, as it had done with other employees.

The Stephenson decision illustrates a couple of best practices: first, an employer should communicate its actual reasons for terminating an employee when it takes that action; second, an employer should make sure that discipline for misconduct is consistent across its employees.

In this case, Potterfield could have told Stephenson that it was not happy with his conduct toward its female employees and that he was being terminated as a result. But instead, it told him that his position was being eliminated—and then abandoned that explanation in the litigation. It also didn’t give Stephenson a chance to rebut the allegations against him, which it had done with other employees accused of similar misconduct. Now, Potterfield will have to face a trial on whether the termination was wrongful.

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