Honest Belief in Validity of Termination Is Successful Defense

​An employer who favors a particular gender when making employment decisions does so at its own peril. However, what if an employer makes a termination decision that appears to favor one gender over another? An employer's honest belief in the validity of an employment decision can be sufficient grounds for dismissing a gender-discrimination lawsuit, according to a 6th U.S. Circuit Court of Appeals decision.

A bank conducted an internal investigation into its security procedures. As part of that investigation, it reviewed video footage of the bank's operations. The footage revealed that three female employees had violated company policy governing access to its cash vault. Two of those employees admitted to violating the policy. All three employees were fired.

The two female employees who admitted to violating the policy nonetheless sued the bank and alleged, among other things, that they were fired based on their gender. In support of their lawsuit, they provided evidence that three male employees had also violated the bank's vault access policy. The three male employees were not fired. Rather, they received performance counseling.

[SHRM members-only toolkit: Involuntary Termination of Employment in the United States]

The lower court granted summary judgment for the bank. On appeal, the dismissal was affirmed. The 6th Circuit ruled that the female employees could not show that the reason articulated for their discharges, violation of the cash-vault access policy, was a pretext for gender discrimination.

The appeals court noted that "when an employer reasonably and honestly relies on particularized facts in making an employment decision, it is entitled to summary judgment on pretext even if its conclusion is later shown to be mistaken, foolish, trivial or baseless." The 6th Circuit elaborated, "The key inquiry is whether the employer made a reasonably informed and considered decision before taking an adverse employment action."

The bank had stated that it fired the two female employees because it saw them on the video and they admitted to the misconduct. Two of the three male employees, in contrast, were not seen on the video and did not admit to any misconduct. The third employee was seen on the video. However, the bank found "mitigating circumstances" to support a decision not to fire him. Specifically, a supervisor had intimidated him into violating the policy, he had complained about the supervisor's action, and he refused to violate the policy again when it was requested.

The appeals court concluded that, based on the strength of the bank's investigation, the bank had an honest belief that the different circumstances surrounding the infractions by the female and male employees justified different disciplines. As such, the plaintiffs could not show that the reason for their terminations was a pretext for unlawful conduct, and their case was properly dismissed.

McLaughlin v. Fifth Third Bank, 6th Cir., No. 18-5712 (May 24, 2019).

Professional Pointer: Unlawful discrimination can arise in the treatment of individuals, as well as in the impact that a policy or procedure has on a protected class. In either case, employers should undertake reasonable investigations and exercise due diligence before implementing a decision that impacts an individual's employment.

Scott M. Wich is an attorney with the law firm Clifton Budd & DeMaria in New York City.