Monday, October 25, 2010

Third Circuit: Employer Who Fired Workers For Poor Performance While Allegedly Engaging In Discriminatory Training Methods May Be Liable For Discrimination

In Grassmyer, et al. v. Shred-It USA, Inc., No.: 09-3876 (3d. Cir. 8/25/2010), the Third Circuit Court of Appeals held that in a sex discrimination claim under Title VII, a plaintiff can rebut an employer's allegedly nondiscriminatory reason for terminating the plaintiff due to poor performance, by setting forth evidence that the employer failed to provide plaintiff the same training and assistance opportunities available to other employees of the opposite sex.

In Grassmyer, three plaintiffs, all female, sued their former employer, Shred-It USA, Inc., claiming that Shred-It illegally discriminated against them on the basis of their sex, in violation of Title VII. Two of the plaintiffs had been fired by Shred-It for failing to meet specifically designated monthly sales quotas. The third plaintiff resigned claiming that she had been constructively discharged. All three plaintiffs admitted that they had failed to perform the minimum monthly sales quotas required of them. Nevertheless, the plaintiffs claimed that Shred-It had discriminated against them when it: (1) did not terminate male sales representatives who were performing comparably or worse than the plaintiffs; (2) applied sales quotas unevenly among male and female sales representatives; and (3) discriminated on the basis of sex in matters such as training, territory assignments and performance requirements.

The trial court dismissed plaintiffs' claims, finding that over the five previous years, Shred-It had terminated seven male sales representatives and only four female sales representatives, and this fact would thus prevent any rational jury from finding that plaintiffs were terminated because of their gender. The trial court also found that plaintiffs' allegations of discrimination with respect to the allocation of sales territories was not actionable due to the undisputed fact that the plaintiffs were unable to meet their sales quotas, and also concluded that the plaintiffs failed to present any evidence whatsoever that the actions by Shred-It with respect to training opportunities "occurred because of invidious gender discrimination."

On appeal, the Third Circuit reversed the trial court's ruling that plaintiffs had failed to set forth a viable sex discrimination claim against Shred-It. Specifically, the Court recognized that the plaintiffs had introduced testimony that conflicted with the evidence set forth by Shred-It as to how training programs and opportunities were provided and how sales territories were assigned. The Third Circuit held that Shred-It's reason for terminating two of the plaintiffs - failure to meet their minimum required sales quotas - did not automatically become legitimate and non-discriminatory simply because plaintiffs' performance failure was undisputed. Rather, the plaintiffs had introduced sufficient evidence to allow a jury to conclude that the reason why plaintiffs had failed to meet their required sales quotas was because they were improperly denied training opportunities and superior sales territories that were provided by Shred-It to its similarly situated male employees. The Court reaffirmed the rule that an employer who discriminates on the basis of a protected class by failing to provide an employee with sufficient training, cannot then automatically escape liability under Title VII by subsequently terminating that employee for poor performance.

The Court also rejected the trial court's reliance upon Shred-It's past termination record of both male and female sales representatives, noting that "Shred-It's past employment statistics say nothing about the training and territory allocations of the male and female sales representatives who were terminated over the last five years or whether Shred-It otherwise discriminated against women in ways that affected their ability to meet the sales quotas, as is alleged here." Furthermore, the Court recognized that even if Shred-It's past employment statistics conclusively demonstrate no past discrimination of women, that would not immunize Shred-It from all present and future claims of discrimination.

The Third Circuit's full opinion in Grassmyer may be read here: