- within Compliance topic(s)
Originally appeared in Labor and Employment Newsletter - February 2002
In McGuinness v. Lincoln Hall, the United States Court of Appeals for the Second Circuit reversed, in part, the summary judgment decision by a New York district court dismissing the claims of Sheila McGuinness, a former executive at Lincoln Hall who claimed that she was offered a less favorable severance package than a black employee because of her sex and her race.
The Second Circuit affirmed summary judgment with regard to McGuinness’ sex discrimination claim, but reversed the district court’s judgment on her race discrimination claim, holding that McGuinness had presented sufficient evidence that she was offered a less favorable severance package upon her termination than a similarly situated black employee because of her race. McGuinness and another executive, Carlton Mitchell, were both terminated as part of a reorganization by Lincoln Hall. McGuinness was offered a severance package of two weeks pay, with no requirement that she sign a general release. Mitchell, who was black, was offered a severance package of 12 weeks’ pay in return for his agreement to sign a general release.
Lincoln Hall argued that it offered Mitchell a more favorable severance package because he negotiated for his severance, retained counsel and threatened to bring legal claims, and because he faced poor job prospects due to a seasonal lull in hiring. Mitchell testified at deposition, however, that he had been offered 12 weeks of severance pay prior to taking any of the actions or raising any issues cited by Lincoln Hall as the basis for its more generous offer.
The appellate court also noted that another white employee was also offered a smaller severance package and that another black employee was offered a severance package involving more money than was offered to McGuinness. The Court found that that evidence, along with the evidence that Lincoln Hall’s proffered reason for the disparity in severance was false, were together sufficient for McGuinness’s racial discrimination claim to survive summary judgment.
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