By Joy P. Waltemath, J.D. Tossing distinctions between "direct" and "indirect" evidence in employment discrimination cases, as well as the use of "convincing mosaic" as a legal test, the Seventh Circuit threw out some of its prior precedent to the extent it relied on any of those discredited approaches. In so doing, the court revived the Section 1981 and state law race discrimination claims of a fired shipping company broker, finding the evidence sufficient to dispute the company’s assertion that it fired the broker for falsifying records (Ortiz v. Werner Enterprises, Inc., August 19, 2016, Easterbrook, F.). The employee worked seven years as a broker for a shipping company. Brokers always tried to book the most profitable loads, but not all loads were profitable at all. Within a week’s time, the employee’s branch assistant manager booked or directed another broker to book six unprofitable loads in the employee’s name, but in no instance did he notify the employee of any of these losing transactions. When the employee learned of the unprofitable loads, it was too late for him to search for a cheaper carrier; however, he later changed the records on three loads to reflect carriers’ later agreement to accept a lower rate because they had not picked up the goods on time. He also removed his name from the other three loads; he said this was a common practice permitted by branch managers. But when he returned from a planned vacation, the company fired him for "falsifying records." District court’s evaluation of evidence. After he sued under Section 1981 and state law, the district court granted summary judgment to the shipping company. It looked at the employee’s evidence under the "direct" and "indirect" methods, considering each method as having its own elements and rules. The court said that the employee could prevail only by evidence that created "a convincing mosaic of discrimination." Under the direct method, the employee had failed to do so because the branch manager’s racial and ethnic slurs did not have anything to do with his firing for falsifying records, and under the indirect method, he failed to do so because by removing his name from the records and changing the rates, he did not meet the company’s expectations. What matters. Said the Seventh Circuit: "The district court’s effort to shoehorn all evidence into two ‘methods,’ and its insistence that either method be implemented by looking for a ‘convincing mosaic,’ detracted attention from the sole question that matters: Whether a reasonable juror could conclude that [the employee] would have kept his job if he had a different ethnicity, and everything else had remained the same." Finding both that it had contributed to the multiple methods and mosaics, but also that every member of the court had indicated disapproval of them over the last decade, the appeals court determined to "jettison these diversions and refocus analysis on the substantive legal issue." No convincing mosaic. Noting that "convincing mosaic" originated as a metaphor to illustrate why courts should not try to differentiate between direct and indirect evidence, because all evidence is inferential and should be considered together, the Seventh Circuit recognized that courts misunderstood and thought it was a new "test" that had to be satisfied. Tracing its own case law that may have contributed to the problem, the court acknowledged that this "mosaic" metaphor had "produced a form of legal kudzu" and reiterated that "convincing mosaic" is not a legal test, overruling its contrary opinions only to the extent that they relied on "convincing mosaic" as a governing legal standard. And the court served notice that any district court that treats "convincing mosaic" as a legal requirement in an employment discrimination case will be subject to summary reversal. Instead, the legal standard is whether the evidence would permit a reasonable factfinder to conclude that the plaintiff’s protected status caused the discharge or other adverse employment action. No direct, indirect method. Rather than asking whether any particular piece of evidence proves the case by itself—whether "direct" evidence does or "indirect" evidence does—evidence is evidence, stressed the Seventh Circuit. "Relevant evidence must be considered and irrelevant evidence disregarded, but no evidence should be treated differently from other evidence because it can be labeled ‘direct’ or ‘indirect.’" This means that courts must stop separating direct from indirect evidence and treating them as subject to different legal standards. The court again accepted its share of culpability, similarly overruling a host of cases but only to the extent they supported the direct vs. indirect approach. It also clarified that its decision did not concern McDonnell Douglas or any other burden-shifting framework, "no matter what it is called as a shorthand." The evidence here. That "rat’s nest" disposed of, the court addressed the evidence here. The employee had testimony from some company employees that they always provided notice when booking a loss in another broker’s name; some expected even to be asked for their permission first. Brokers testified that they and others sometimes removed their names from unprofitable loads, and the company could not identify an express policy that forbade the practice. A former company broker submitted a declaration that in his 20 years at the company he had sometimes asked tardy carriers to lower their rates, which reflected industry practice. Several current and former employees additionally testified that the branch manager and assistant branch manager directed ethnic slurs at the employee (including "beaner," "taco eater," "f***ing beaner," "dumb Mexican," "stupid Puerto Rican," "f***ing Puerto Rican," and "dumb Jew"). Based on this evidence, the Seventh Circuit found that a reasonable juror could infer that branch management didn’t much like Hispanics, tried to pin heavy losses on the employee, and that because of his ethnicity, fired him for actions that were tolerated from other brokers. Although a jury also could credit the company’s explanations, given the conflict on material issues, the court found a trial was necessary. After-acquired evidence. The company further contended it would have fired the employee anyway because, after it discharged him, it discovered he was using his work email to send and receive sexually explicit material. This could justify a discharge, but the company could not use this alternate ground to support a discharge that occurred before the email issue surfaced. The court left to the jury to determine whether it would affect the employee’s damages, if any.
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