Monday, May 5, 2008

Best of -- Sixth Circuit confirms that it will not second-guess an employer's honest belief

The following two Sixth Circuit decisions make it clear that pretext for discrimination or retaliation does not exist if the employer engages in a reasonable investigation and has an honest and good faith belief in the rationale for its employment decision. These cases are a good reminder that one of the best defenses to any discrimination, retaliation, or harassment claim is a thorough, well-documented investigation.

Michael v. Caterpillar Fin. Servs. Corp. concerned a six-year African-American employee who had a good employment record until her manager was replaced. Shonta Michael claimed that the discipline, including a very confrontational meeting in which the new manager aggressively yelled at her, was racially discriminatory and that she was retaliated against after she complained over the manager's treatment of her. Caterpillar, on the other hand, claimed that any conflict and discipline was solely because of legitimate performance issues.

The Court skirted the issue of whether the disciplinary action (a performance plan) constituted an "adverse employment action," finding that regardless Michael could not prove that the employer's actions were pretext for discrimination or retaliation. Caterpillar's investigation included interviews of all of Michael's co-workers, many of whom found her difficult to work with. Michael claimed that her disagreement those facts established pretext. The Court disagreed:

Michael's disagreement with the facts uncovered in Caterpillar's investigation does not create a genuine issue of material fact that would defeat summary judgment "as long as an employer has an honest belief in its proffered nondiscriminatory reason." The key inquiry in assessing whether an employer holds such an honest belief is "whether the employer made a reasonably informed and considered decision before taking" the complained-of action. An employer has an honest belief in its rationale when it "reasonably relied on the particularized facts that were before it at the time the decision was made." "[W]e do not require that the decisional process used by the employer be optimal or that it left no stone unturned." ... Caterpillar presented sound, nondiscriminatory reasons for the action that it took based on a reasonable investigation of events that occurred after Michael’s favorable performance review.

Because Caterpillar had extensive documentation of its investigation, it could reasonably rely on its conclusions with no finding of pretext or retaliatory animus.

By comparison, in Denhof v. City of Grand Rapids, the issue was whether the Grand Rapids Chief of Police reasonably relied upon a psychological fitness for duty exam in refusing to permit the plaintiff to return to work. The Court found that the Chief's reliance on the medical opinion was unreasonable because the doctor's written opinion showed that he had a preordained opinion on Denhof's unfitness for duty:

In his January 11, 2002, letter recommending a fitness for duty examination for Patricia Denhof, Dr. Peterson employed language that, at a minimum, suggested his opinion had already been formed. For instance, he noted that in view of the tension between Denhof and the department, "it is difficult to imagine how she could continue to work in this environment." ... This language should have signaled to Chief Dolan, and indeed any reasonable recipient, that Dr. Peterson was predisposed to finding Denhof unfit for duty. Indeed, after comments like this, it is hard to see any possibility that Dr. Peterson's examination would yield a result other than finding that Denhof should be separated from the police force. Instead, when Dolan was confronted with a psychologist who had already formed his opinion before examining the patient, he asked that doctor to proceed with the examination. In doing so, he forfeited the protection of the honest belief rule, because the jury could have easily concluded that his reliance on a doctor who had already made up his mind did not qualify as reasonable reliance.

According to the Court, the employer could not have an honest belief about Denhof's lack of fitness to return to work because, according to the opinion the doctor upon whom it was relying was predisposed. Thus, the decision could not have been bona fide. I'm troubled by the ease with which the Denhof panel writes off the employer's reliance on a medical opinion and delves into the motivations of the psychologist. The doctor's language does not seem nearly as clear to the me as it did to the Sixth Circuit. Moreover, if an employer cannot have an honest belief about a medical opinion what can it hold an honest belief about? Nevertheless, these two cases reaffirm the honest belief rule, and demonstrate that courts will not second-guess a personnel decision if it is based on a rational, reasoned, honest belief.