Over the past year, many employer have been faced with the need to restructure their businesses, eliminating jobs for economic reasons. In some situations, the job eliminations affect employees who have filed internal or external complaints, alleging discrimination, harassment or other legal claims. Employers worry that the job elimination decision will trigger retaliation claims from these displaced employees. The retaliation claims generally do not challenge the underlying business reasons for the restructuring. Rather, they question why the plaintiff was affected instead of co-workers.
In Scruggs v. Garst Seed Co. the Seventh Circuit Court of Appeals recently demonstrated how employers can prove that their restructuring decisions were not retaliatory. In this case, the plaintiff made internal complaints and an EEOC charge alleging that her supervisor had made derogatory comments toward her and other women in the company. Shortly thereafter, her job was eliminated as part of a company-wide restructuring. The plaintiff later applied for a newly opened position with the company, but was not selected. She sued under Title VII, alleging that her initial selection and failure to be rehired were in retaliation for her earlier complaints.
The Seventh Circuit affirmed summary judgment for the employer. The initial elimination of the plaintiff's position was one of a number of such decisions that affected several company employees, including those who had never made any complaints. The employer also demonstrated that the elimination decision was made before the plaintiff's initial complaint. The employer also was able to show that the individual hired for the new job was better qualified than the plaintiff, and in fact had recently been eliminated from that same job.
The employer's documentation of the restructuring process was crucial to its ability to prevail on the retaliation claims. Contemporaneous records of the business reasons for the decisions made, and the exact timing of those decisions proved key to the ability to avoid claims for discrimination or retaliation.