Employment Law Daily Former supervisor’s statement as to why employee wasn’t promoted improperly excluded as hearsay
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Wednesday, May 1, 2019

Former supervisor’s statement as to why employee wasn’t promoted improperly excluded as hearsay

By Kathleen Kapusta, J.D.

The 2011 amendment to Fed. Rule Evid. 801(d)(2)(D) did not add a requirement that the declarant maintain the same scope of employment at the time the statement is made; the Rule requires only that the statement be made during the existence of the employment relationship, stressed the court.

Federal Rule of Evidence 801(d)(2)(D), which provides that a statement is not hearsay and may be admitted against an opposing party if the statement “was made by the party’s agent or employee on a matter within the scope of that relationship and while it existed,” does not contain an additional requirement that the declarant must still be in the same scope of employment at the moment the statement was made, the Ninth Circuit ruled. As a result, it was error for court below to exclude as hearsay a statement by an employee’s supervisor concerning the reason for his nonpromotion—”You’re not white. And you’re not female”—simply because she was no longer a supervisor at the time of the statement; similarly, it was error to grant summary judgment on his Title VII failure to promote claim. Reversing in part and affirming in part, the appeals court found the district court properly dismissed the employee’s wrongful termination claim. Judge Bybee, in a partial dissent, argued that the district court did not hold that the statement could not be admitted under Rule 801, only that it would not be admitted without some explanation for why the supervisor could speak for the employer at the time of the statement (Weil v. Citizens Telecom Services Co., LLC, April 29, 2019, Smith, N.R.).

At the time of his 2011 promotion to call center manager, the employee was praised in his performance review for his leadership skills and received high overall scores. In September 2012, he became the interim acting director of the call center. His 2012 performance review, however, showed declines in several categories.

Not selected. When the employer began the hiring process for a permanent director, the employee was among the handful of applicants considered qualified for the position. His supervisor interviewed him and two other candidates and recommended that the broader team consider him for the position. That same month, the supervisor was removed from her positon and placed into a specialized role. Her replacement took over her responsibility for filling the position and selected a white woman who had a 2012 performance rating slightly lower than the employee’s and did not have a Bachelor’s Degree, which was listed as a preferred qualification for the job.

Former supervisor’s statement. The employee was then placed on a Development Action Plan that identified areas for improvement. Shortly thereafter, he spoke to his former supervisor, whom he alleged told him he was not promoted in part because he was not white and not a female. Two months later, she was terminated. When he failed to meet the DAP requirements, the employee was placed on a performance improvement plan and fired when his 2013 performance review showed further declines.

District court proceedings. The employee then sued, asserting claims under Title VII, Section 1981, and the Washington Law Against Discrimination for wrongful and discriminatory failure to promote and termination. Opposing his employer’s motion for summary judgment, the employee offered the statement by his supervisor, which the lower court found was inadmissible under Rule 801(d)(2)(D) for lack of foundation because the supervisor was not employed in the supervisor position at the time she made the statement. The court then found the employee failed to produce evidence of pretext on his failure-to-promote claim and granted summary judgment against it. It also granted summary judgment against his wrongful termination claim because he did not present a prima facie case.

Unambiguous. Reversing as to the failure-to-promote claim, the Ninth Circuit explained that the federal evidentiary rule at issue sets forth three elements necessary for admitting a statement that would otherwise be excluded as hearsay: (1) the statement must be made by an agent or employee of the party against whom the statement is being offered; (2) it must concern a matter within the scope of that employment relationship; and (3) it must be made while the declarant is yet employed by the party. “There is no additional requirement,” wrote the court, “that the declarant must still be in the same scope of employment at the moment the statement is made. The Rule’s language is unambiguous.”

Scope of employment. With respect to the second element, the court reasoned, a statement may concern a matter within the scope of employment even though the declarant is no longer involved with that particular matter when the statement is made as long as the declarant was involved with the matter at some prior point in the declarant’s employment. Further, a matter may fall within the scope of a declarant’s employment even though the declarant did not have final decisionmaking authority on the matter.

Not a substantive change. As to the third element, the court noted that when it was first enacted, Rule 801(d)(2)(D) excluded from the definition of hearsay a statement offered against a party made “by his agent or servant concerning a matter within the scope of his agency or employment, made during the existence of the relationship.” Thus, it required that the declarant’s statement be made while the employment relationship existed, not within a specific scope of that relationship. When the rule was amended in 2011, the advisory committee notes made clear that the changes were intended to be stylistic only. “The 2011 amendment,” said the court, “did not add a requirement that the declarant maintain the same scope of employment at the time the statement is made.”

Absurd results. To read the rule otherwise, the court observed, could lead to absurd results. “Such a reading disregards the agency principles on which the Rule is predicated and would potentially allow employers to avoid liability by merely changing employees’ positions or narrowly redefining the scope of their employment.”

Evidence of pretext. Applying the rule to this case, the court found the statement was admissible. The employee laid sufficient foundation to establish each of the three elements: the statement was proffered by the employer’s employee; it was offered against the employer; and it concerned a matter within the scope of her employment. Accordingly, the district court erred in excluding it. Further, the statement was evidence that the employer’s nonselection of the employee were merely pretextual, said the court, finding that the district court erred in granting summary judgment on his failure-to-promote claim.

Termination claim. The lower court, however, properly granted summary judgment against the employee’s termination claim, as he failed to present sufficient evidence he was performing satisfactorily or that the employer treated a similarly situated employee more favorably. The undisputed evidence, including his performance reviews and his own self-ratings, showed his performance steadily declined from 2011 to 2013. And while he introduced evidence that no white female directors were placed on PIPs or terminated during the relevant period, there was no evidence any of them failed to meet deadlines and complete tasks, or had steadily declining performance reviews.

Dissent. Dissenting in part, Judge Bybee argued that “the majority missed a nuanced but critical point: If it is admissible at all, [the supervisor’s] statement is admissible against Frontier as evidence of Frontier’s positon only up until the point she was relieved of her responsibilities in January 2013.” If he had attempted to introduce the supervisor’s statement as evidence he was not going to get the job while she was in charge, then the statement is likely admissible, said the court, noting the problem was the employee admitted the supervisor was long out of the loop when she made the comment.

She had been demoted and replaced by someone not previously involved in the hiring process. Her replacement interviewed candidates, consulted with management, and hired the selectee. “Nothing in the chain of events suggests that [the supervisor] knew why, in March, Frontier passed over [the employee] and hired [the selectee].” To be clear, wrote Judge Bybee, “I am not suggesting that the district court had to exclude [the supervisor’s] statement—only that given the lack of a foundation [the employee] laid, it did not abuse its discretion in doing so.”

Further, observed Judge Bybee, “Rule 801(d)(2)(D) is not so restrictive that it would limit party admissions to principals but is also not so generous as to allow employees to speak for their employers on matters that their employers had deliberately removed from the scope of their authority. The district court did not commit legal error in requiring [the employee] to lay a foundation defining the scope of [the supervisor’s] authority.”

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