Jottings By An Employer's Lawyer

Thursday, March 25, 2010

5th Circuit En Banc Request on Smith v. Xerox, Please!

A three judge panel of the 5th Circuit yesterday divided sharply on a case that poses a number of interesting legal issues of great importance for discrimination and retaliation cases in the 5th Circuit. It cries out for an en banc review. Smith v. Xerox Corp. (5th Cir. 3/24/10) [pdf].

Among the issues decided:
  • the Gross analysis is not applicable to Title VII retaliation cases;
  • that a case seemingly tried on a pretext basis will support a mixed motive submission, and plaintiff is not forced to concede that there is some valid basis for termination in order to obtain a mixed motive instruction; and
  • where there was good evidence of the basis for the termination decision, and no real focus on the subjective intent of the managers making the termination decision, there was insufficient evidence to support a $250,000 punitive damage award.
Although Xerox lost on the first two points, it did prevail on the third in a monetarily big way, so either side could be asking for additional review, or both sides might decide they were better off with their victory. I could certainly see the arguments for each position.

But as a bystander unhampered by any stake in the outcome, I see this as a case where all three are extremely important practical issues,  particularly the second one, where the trial bench and bar really need clear guidance.

Judge Jolly, who dissented from the opinion written by Judge Reavley, joined by Judge Wiener, had the following to say about that issue:
Smith’s entire claim in this case was presented to the jury as pretext. Smith alleged that every reason given by Xerox for her termination was pretext  for age and gender discrimination or, alternatively, pretext for retaliating against her because of her EEOC charge. Smith did not argue or acknowledge that the reasons for her discharge were valid; she argued that the employer’s reasons were pretextual, i.e., false, an illegal sham. And, both with respect to discrimination and retaliation, the jury was instructed accordingly: “If you disbelieve the reason(s) Defendant has given for its decision, [i.e., pretext,] you may infer Defendant terminated Plaintiff because she engaged in protected activity.” In short, if discrimination in an alleged mixed-motive case must be shown by pretext, it is not a mixed-motive case at all, it is a pretext case. It should be that short and simple.
In an important footnote in that paragraph, Judge Jolly noted, "we have long required plaintiffs who ask for a mixed-motive instruction to acknowledge the employer’s legitimate motives for discharge," a requirement now expressly disavowed by the majority.

On the other issue that Judge Jolly took issue with, the applicability of the Gross analysis, he wrote:
The majority disagrees, however, asserting the lame distinction that, although the language is identical, Gross was an age discrimination case under the ADEA and the case today is a retaliation case under Title VII. Given the uniform principle set out in Gross, the majority’s distinction is the equivalent of saying that a principle of negligence law developed in the wreck of a green car does not apply to a subsequent case because the subsequent car is red—a meaningless distinction indeed.
Given the clear divide, and the importance, en banc, please!

Update (4.21.10): En banc review is not going to happen. The most recent entry on the docket sheet is a 4/19 letter to the court transmitting a joint Satisfaction and Release of Judgment filed with the district court on 4/19. That pleading states that Xerox has satisfied the original judgment, less the vacated punitive damages, in the amount of $208,159.03.  Impossible to argue with the business decision, but it is a shame that there is no clarification of the opinion.

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