Labor & Employment Law Daily Female worker denied severance pay not similarly situated to male coworkers granted severance earlier
Wednesday, October 17, 2018

Female worker denied severance pay not similarly situated to male coworkers granted severance earlier

By Kathleen Kapusta, J.D.

Not only did an employer’s circumstances materially change between the time the last proposed male comparator sought severance pay and the time the employee first sought severance pay approximately five months later, the company’s severance policy prevented her, but not the three proposed comparators, from receiving severance pay, the Seventh Circuit explained, affirming summary judgment against her Title VII sex discrimination claim. And while the employee also appealed the lower court’s overruling her objection regarding sanctions over missing emails, her version of the emails contained “neither a smoking gun, nor a shard of colored glass for the (jettisoned) convincing mosaic, nor any other reason to deny summary judgment” (Barbera v. Pearson Education, Inc., October 12, 2018, Manion, D.).

Under the employer’s severance policy, only employees involuntarily terminated without cause were eligible for severance pay. Further, if an employee was terminated as a result of a sale, merger, or other transaction in which the employee was offered employment by another employer in connection with the transaction, the employee was ineligible for severance pay. When the employer, an education publishing company, began to shift focus from physical to digital products in 2013, it saw a need to reduce its warehouses. Accordingly, in 2013 and early 2014, it issued voluntary separation plans (VSPs) offering severance pay to certain employees who left voluntarily. The employee was ineligible for the 2013 plan and declined to participate in the 2014 plan.

Male coworkers granted severance pay. In July 2014, the company issued a “Request for Proposal” to various entities, seeking to outsource. In August, a male engineering director decided to leave. He requested and was granted severance pay. In March 2015, a male senior VP also decided to voluntarily separate and was granted severance pay. In April, a male IT system administrator was allowed to voluntarily resign with severance pay.

Warehouse transfer. During the summer of 2015, the employer decided to transfer its warehouses and print services to R.R. Donnelley & Sons, and by July, it gave Donnelley a list of warehouse employees so it could make placement decisions. In September, the employee’s supervisor told her about the transfer and that she and other warehouse employees would be “rebadged.” Sometime in the latter part of 2015 and early 2016, the employee made several requests to leave with severance pay, which were denied. An email exchange as to one request was destroyed. Her employment with the employer ended in February 2016, and she did not appear for work on the day she could have started working with Donnelley.

Lower court proceedings. She sued for among other things sex discrimination and moved for sanctions against the employer based on the missing email exchange. A federal magistrate barred the employer from disputing the employee’s description of the email exchange but refused to grant further sanctions. The district court, after overruling the employee’s objection, granted summary judgment to the employer because the proposed comparators were not similarly situated.

Missing emails. On appeal, the Seventh Circuit first held that the district court was not unreasonable in declining to find the employer intended to deprive the employee of the emails. The cure granted was enough, said the court, observing that the employee’s version of the emails contained no smoking gun and even if the district court had found that the employer’s act was intentional, relief was discretionary, and she failed to show how acceptance of other allegations in her proposed stipulations would have prevented summary judgment.

Sex discrimination. As to her sex discrimination claim, “this case boils down to timing,” said the court, noting that while the employee pointed to three men who received severance pay outside the VSPs, they requested severance pay and left the company well before the employee made her first request and well before her email request in January 2016. This timing distinction, explained the court, meant the proposed comparators were not similarly situated because the company went through rapid, material changes during 2015, including the decision in the summer of 2015 to contract with Donnelley, providing Donnelley with information in July 2015 regarding warehouse employees in order to assist it with placement decisions, and signing the contract with Donnelley in October.

The district court, said the Seventh Circuit, correctly concluded that the employer’s impending transaction with the promise of continued employment to individuals such as the employee was a differentiating circumstance between her and the proposed comparators. When the three proposed comparators sought severance, the employer was shifting to digital products, consolidating warehouses, and making other budget cuts. In contrast, when the employee first sought severance sometime in the later part of 2015, the employer was not seeking to eliminate positions for budget concerns and had already decided to transition its entire warehouse workforce to Donnelley.

Severance policy. The court also found it significant that none of the three proposed comparators were offered jobs by Donnelley, that there was no evidence it would have offered them jobs, and that the employee was offered the same position she held with the employer. The severance policy, it pointed out, prohibited severance pay in the event of a corporate transaction when the employee was offered employment by the acquiring entity. “When all the evidence is piled together,” said the court, “there are no facts or reasonable inferences” from which a reasonable jury could conclude the employer discriminated against the employee because of her sex.”

No pretext. As to her claim of pretext, in which she argued that the employer gave two different explanations for the denial of severance—she had to opt into the 2014 VSP, which she failed to do, and the merger/acquisition clause of the severance policy applied to her due to the impending Donnelley transaction—the court found that while the explanations differed, they were not mutually exclusive. Both could be true without violating the principle of non-contradiction, said the court, affirming summary judgment against the employee’s severance pay sex discrimination claim.

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