United States: Fifth Circuit Upholds Jury Verdict In Constructive Discharge Case Due To Employer's "Shifting Reasons" For Its Personnel Decisions

Last Updated: January 31 2018
Article by Tiffany L. Cox

In Delaronde v. Legend Classic Homes, Ltd., No. 17-20027 (January 18, 2018), the Fifth Circuit Court of Appeals affirmed a district court's denial of an employer's post-verdict motion for judgment as a matter of law, finding that the jury had been presented with sufficient evidence to conclude that sex discrimination had motivated the transfer of a female sales associate for a Houston-area home builder from a successful community where she had achieved more than $3 million in sales to a very challenging community where the home prices were the lowest of any of the builder's properties. The concluded that the transfer had reduced her actual and potential earnings, that she had properly compared her treatment to that of the male sales associate who replaced her at the former community because their job titles, responsibilities, and experience were similar, and that the builder had offered shifting explanations for the transfer. 

Background

Plaintiff Arleen Delaronde worked as a sales associate for defendant Legend Classic Homes, Ltd. from 2010 to 2013. Initially, Delaronde worked at the Legends Trace community. There, Delaronde formed a partnership with another female sales associate, Maria Dorman, whereby they agreed to work collaboratively and share commissions. While Legend claimed to be uncomfortable with the partnership, the partnership proved profitable for Delaronde, Dorman, and Legend, with the Legends Trace community realizing more than $9 million in net sales in 2012.

In November of 2012, Legend hired a male sales associate, Marvin Bullard, and placed him at the Legends Trace community. Legend then transferred Delaronde to the Deerbrook Estates community and in doing so, represented to Delaronde that it would be a temporary assignment for the purpose of training a new sales associate. The assignment became permanent, however, and Delaronde struggled to sell homes in Deerbrook Estates, as the homes in that community targeted a lower income (and more credit-challenged) population. Total sales for Deerbrook Estates totaled less than $3 million in 2013—sales which paled in comparison to the $13 million realized at Legends Trace. As her commissions declined, Delaronde resigned her employment with Legend. She later filed suit alleging sex discrimination and constructive discharge in violation of Title VII of the Civil Rights Act of 1964, as amended. Following an adverse jury verdict, Legend filed a post-verdict motion for judgment as a matter of law, which was denied. 

The Fifth Circuit's Decision

On appeal, Legend argued that Delaronde had failed to present legally sufficient evidence that she had been treated differently than a similarly situated man in nearly identical circumstances. Delaronde claimed that Legend had treated Bullard more favorably by assigning him to Legends Trace. While there were certainly arguments to be made that the two were not similarly situated, the Fifth Circuit—applying an "especially deferential" standard of review—found there to be "sufficient evidence for a reasonable trier of fact to find Bullard was a similarly situated comparator who was treated more favorably than Delaronde." The Fifth Circuit stated:

Delaronde's and Bullard's job titles, responsibilities, and equivalent experience were close enough for a reasonable factfinder to view Bullard as being "similarly situated." Further, the circumstances and outcomes surrounding Delaronde's and Bullard's transfers were sufficient for a reasonable factfinder to find Bullard was treated more favorably than Delaronde.

Presumably important to the Fifth Circuit's decision was its observation of Legend's "shifting reasons for transferring Delaronde." Legend's justifications for and descriptions of the transfer had varied from a mere staffing change to a promotion to a "way to dismantle the partnership between Delaronde and Dorman" to training needs. Consequently, the court reasoned that these inconsistencies could have been viewed by a reasonable juror as being pretextual for sex discrimination. 

Key Takeaways for Employers

The Delaronde case emphasizes the importance of consistency in articulating the legitimate, nondiscriminatory reason for a particular personnel decision. From the moment an employer is on notice of a claim, it is imperative that the employer conduct a thorough investigation, such that the employer has confidence in the information it advances outside the organization. Oftentimes, position statements are submitted to the U.S. Equal Employment Opportunity Commission in haste, without the benefit of the same sort of exhaustive investigation that is conducted later during the litigation phase of a case. This creates a situation that is ripe for unintentional inconsistencies simply because new or additional facts are learned during a later, more in-depth investigation of the claims. Such risk can be minimized early on by proceeding carefully and prioritizing more sophisticated investigations at the beginning of a matter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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