Employment Law Daily Sales manager advances Sec. 1981 claim he was fired after execs learned he was black
Thursday, March 10, 2016

Sales manager advances Sec. 1981 claim he was fired after execs learned he was black

By Marjorie Johnson, J.D. A regional sales manager who claimed that management decided to fire him once they learned he was black advanced his Section 1981 and state law claims of race bias. A federal court in Minnesota held that Title VII’s 15-employee threshold did not apply to Sec. 1981 claims and found that comments that “an African-American should not have been hired to work in sales” and that “a black person cannot sell power sports in the South” constituted direct evidence of bias. The court also granted the state human rights agency’s motion to intervene (Wilson v. CFMOTO Powersports, Inc., March 7, 2016, Tunheim, J.). The employee was hired as CFMOTO Powersport’s regional sales manager for the south after a phone interview with its CEO on June 1, 2011. He lived in Kentucky, but was advised that he would be required to attend training and other meetings in Minnesota, where the company’s executives worked. When he attended his first training, the CFO and operations manager learned for the first time that he was black. Each allegedly made comments indicating that this just wouldn’t do, and he was ultimately terminated by the CEO on August 16. No minimum employee threshold. The court squarely rejected CFMOTO’s assertion that it was not an “employer” under Sec. 1981 since it had less than 15 employees. Title VII clearly provides that the 15-employee threshold only applies for the purposes of this subchapter. Sec. 1981 is in a different subchapter that contains no such threshold. Additionally, the Supreme Court has recognized that Sec. 1981 claims are not subject to the same procedural and administrative requirements as Title VII claims. Inference of bias. The employee also plausibly alleged disparate treatment under the indirect method. First, he alleged multiple facts showing that he was qualified, including that he had operated a scooter business that was an approved dealer of CFMOTO mopeds and had more sales experience than his peers. He also alleged enough facts from which race bias could be inferred. For instance, he claimed that the company’s Minnesota employees did not learn that he was black until after he was hired. He also alleged unfair treatment (beyond his termination), such as that he received lower pay and was denied training. Direct evidence. The employee also asserted direct evidence by claiming that the CFO told the operations manager that “an African-American should not have been hired to work in sales,” and that the employee “would not be allowed to continue.” He also claimed that a white sales rep. complained to the CEO that the employee should not have been hired because “black people did not buy mopeds and ATVs” and that “black people do not ride ATV’s [and] do not come to shows,” and “a black person cannot sell power sports in the South.” Finally, he asserted that two African-American warehouse workers said “they were shocked that the company hired a black person for a sales/marketing position.” While not direct evidence, this allegation provided helpful context. The court rejected the contention that the comments by the CFO and sales rep were stray remarks by non-decisionmakers. Given the company’s small size, it was entirely plausible that the two were involved in some capacity in the decisionmaking process that led to the employee’s firing. Moreover, the sales rep purportedly told a coworker that he believed his complaint about the plaintiff to the CEO led to his firing. MHRA claims. The employee also had standing to bring his claims under the Minnesota Human Rights Act, rejecting the company’s assertion that he did not “work” in the state. While he spent most of his time in Kentucky, he claimed he spent between nine and eleven days in Minnesota for training, was expected to return for future trainings and meetings, reported to and communicated with Minnesota supervisors, and was discriminated against in the state. Although a “close call,” this was enough to survive a motion to dismiss. He also presented enough evidence of a contractual relationship to advance his MHRA business discrimination claim. MDHR can intervene. The court also granted a motion to intervene by the commissioner of the Minnesota Department of Human Rights. Rejecting the employer’s assertion that intervention would be per se prejudicial since the MDHR did not make its final probable cause determination until 37 months after the employee’s original charge, the court emphasized that the agency made its initial probable cause determination 24 months after the charge. The employer had contested that determination, resulting in it being vacated and remanded for additional investigation. As such, it was responsible for the MDHR’s delay, so it could not now claim prejudice. Even if the MDHR’s delay exceeded 31 months (the time set forth by the Minnesota Supreme Court as being per se prejudicial), it was not clear that the applicable caselaw applied since this was a civil action brought by the employee against another private party. Moreover, CFMOTO still had to defend itself against the employee’s claims even if intervention were denied. Also, the commissioner had a strong independent motivation to intervene: to protect the MDHR’s interests in administering the MHRA. Finally, the MHRA explicitly allowed the MDHR to intervene in private civil actions, including in cases where the employee files the action directly in the district court without first pursuing administrative remedies.

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