United States: WCP Employment Law Newsletter: Obtaining Summary Judgment After Reeves

For an employer defending a charge of employment discrimination, more than most other civil litigants, a great deal turns on winning the case on a motion for summary judgment. The costs of trying an employment discrimination case to a jury — the risk of adverse publicity; the interference with the operation of one’s business; the effect on workplace morale; not to mention the usual litigation expenses — mean that the stakes at the summary judgment stage are very high. And it hardly needs to be added that winning the case before it is submitted to a jury is the only way to guard against the exposure which could result from a large plaintiff’s verdict.

A recent Supreme Court decision, Reeves v. Sanderson Plumbing Products, 120 S. Ct. 2097 (2000), resolved an important disagreement among the lower federal courts over the legal standards which will govern an employer’s motion for summary judgment. The opinion also gives rise, however, to a number of strategic questions that an employer will need to address in the earliest phases of responding to an employment discrimination lawsuit. And despite the Supreme Court’s decision, Reeves makes clear that there remains substantial uncertainty in this area of the law, to which an employer defending an employment discrimination claim must remain sensitive.

The Reeves decision. Under established precedent, an employment discrimination plaintiff may seek to overcome an employer’s motion for summary judgment in either of two ways. First, the employee may seek to present "direct evidence" of discrimination, typically by pointing to statements made by the employer indicating that the adverse employment decision was motivated by the employee’s race, gender, or disability. In many cases in which an employee is unable to present such "direct" evidence, however, courts have specifically, the Supreme Court has held that an employee who is unable to present direct evidence that he or she was subject to discrimination may present an inferential case by establishing that he or she is a member of a protected class,1/ was qualified for the position he or she sought or held, and was either terminated or passed over for a position or promotion. If the employee is able to establish this prima facie case, it is the employer’s burden to come forward with a non-discriminatory reason for its decision. The plaintiff then has the opportunity to challenge that non-discriminatory reason as "pretext" for an unlawful motive. The underlying rationale is the commonsense notion that if the employer offers a false reason for its decision, the actual reason may well be unlawful discrimination. Furnco Constr. Corp. v. Waters, 438 U.S. 567, 577 (1978).

Before Reeves, the courts of appeals had divided on the question whether — if a plaintiff presents sufficient evidence to permit a reasonable factfinder to conclude that the employer’s proffered reason was false — that is necessarily sufficient evidence to permit a factfinder to conclude that the actual reason was discriminatory, and therefore to defeat summary judgment.2/ In general, courts of appeals had taken one of three positions. First, some courts held that a plaintiff can always defeat summary judgment by presenting evidence of pretext. See, e.g., Kline v. TVA, 128 F.3d 337 (6^th Cir. 1997). Second, some courts held that a plaintiff can never defeat summary judgment unless he presents both evidence of pretext and evidence that the real reason was discrimination. See, e.g., Fisher v. Vassar College, 114 F.3d 1332 (2d Cir. 1997) (en banc). Third, some courts had taken an intermediate position, holding that such a showing of pretext will typically be sufficient to permit a finding of discrimination, but that it is not always the case. See Aka v. Washington Hosp. Ctr., 156 F.3d 1284 (D.C. Cir. 1998).

The Supreme Court’s decision in Reeves, in a unanimous opinion by Justice O’Connor, adopts this intermediate position: "[A] plaintiff’s prima facie case, combined with sufficient evidence to find that the employer’s asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated." Reeves, 120 S. Ct. at 2109. The Court went on, however, to say that such an inference will not always be available. "This is not to say that such a showing will always be adequate to sustain a jury’s finding of liability." Id. Rather, there "will be instances where, although the plaintiff has established a prima facie case and set forth sufficient evidence to reject the defendant’s explanation, no rational factfinder could conclude that the action was discriminatory." Id. Specifically, the Court noted that "an employer would be entitled to judgment as a matter of law if the record conclusively revealed some other, non-discriminatory reason for the employer’s decision, or if the plaintiff created only a weak issue of fact as to whether the employer’s reason was untrue and there was abundant and uncontroverted independent evidence that no discrimination had occurred." Id.

Strategic concerns. In addition to resolving the specific question regarding the legal standard applicable to an employer’s motion for summary judgment, the Reeves decision also gives rise to a number of strategic questions to which an employer must give careful consideration at the beginning of its defense of an employment discrimination claim.

• Quickly develop a comprehensive theory of the case. The conventional wisdom in defending an employment discrimination claim had maintained that the central task was to determine the nondiscriminatory reason for the challenged decision, and that the principal objective in discovery was to thwart the plaintiff’s efforts to attack that rationale.

This "defensive" approach to discovery may no longer be the right strategic choice. Reeves indicates that on summary judgment, the question will not be a mechanical exercise of determining whether the employer’s explanation survives the plaintiff’s challenge to it. Rather, the holding of Reeves is that the district court should balance the inference that one may draw from the plaintiff’s challenge to the proffered explanation against the overall strength of the employer’s evidence showing that the reason was non-discriminatory — and permit the case to reach a jury only if a reasonable factfinder, weighing all of the evidence, could find that the actual reason for the challenged decision was unlawful discrimination.

For this reason, it may be important that in responding to interrogatories, employers present a more fulsome defense of the challenged employment decision. By the same token, it will often be important that an employer’s witnesses come to their depositions prepared not only to explain the non-discriminatory reasons for the employment decision, but also to present all of the evidence indicating that the ultimate decision was not based on impermissible discrimination.

• Use of demographic data. One of the factors that the Reeves Court endorsed, for the purpose of determining whether a challenged employment decision was based on an improper motive was the racial balance of the overall workforce. Reeves, 120 S. Ct. at 2111. An employer — particularly a large corporation that conducts a nationwide business — needs to exercise great care in deciding whether to rely on such evidence in defending an employment discrimination claim. Courts often will find that an employer that has advanced such an argument has "opened the door" to broad discovery of its employment practices — and anecdotal evidence of discrimination or harassment — on a nationwide basis, whereas courts may otherwise limit discovery to the division or operation in which the plaintiff works or to which the plaintiff applied. Accordingly, despite the invitation extended by Reeves, an employer must carefully weigh the costs and benefits before deciding whether to rely on evidence of the racial or gender "balance" of its workforce in responding to a discrimination claim.

Unanswered questions. While the Reeves decision lends some additional clarity to the legal standards to be applied to an employer’s motion for summary judgment, there remain unanswered questions. Specifically, Justice Ginsburg’s concurring opinion in the Reeves case expressly noted that the Court’s opinion did not define with precision the circumstances in which an employer will be entitled to summary judgment despite the fact that a plaintiff presented sufficient evidence to permit a factfinder to reject the employer’s proffered reason. Rather, Justice Ginsburg observed that this issue will be subject to "further elaboration" in future cases. Reeves, 120 S. Ct. at 2112 (Ginsburg, J., concurring). Counsel for employers must therefore remain alert to current developments in this rapidly-changing area of law.

1/ While Reeves itself involved a claim of age discrimination, the basic principles set out in the case will apply equally to claims of discrimination on account of race, gender, or disability.

2/ Reeves arose in connection with the employer’s post-trial motion for judgment as a matter of law, rather than a motion for summary judgment. But as the Court in Reeves made clear, the substantive standard for these motions is the same: whether there is sufficient evidence in the record to permit a reasonable factfinder to find in favor of the nonmoving party. Reeves, 120 S. Ct. at 2109-2110.

This letter is for general informational purposes only and does not represent our legal advice as to any particular set of facts, nor does this letter represent any undertaking to keep recipients advised as to all relevant legal developments. Client Newsletter also available at http://www.wilmer.com