Skip to Main Content

Keeping you informed

Alleged Attempt to Change Business' Demographics Deemed Direct Evidence of Discrimination

    Client Alerts
  • October 07, 2022

Under the “stray remarks” doctrine, courts can conclude that an employer’s expressions of frustration, or comments by a manager not involved in an adverse employment decision, are not persuasive evidence of discrimination. A recent unpublished decision from the Fifth Circuit Court of Appeals demonstrates the limitations of relying on the stray remarks doctrine to avoid liability for employment discrimination.

In EEOC v. Ryan’s Pointe Houston, LLC, the Equal Employment Opportunity Commission (EEOC) sued an employer on behalf of a pregnant property manager of Mexican descent. The agency alleged that the employer terminated the manager as part of its attempt to cater to a “higher class” of residents. The EEOC introduced testimony that the property owners referred to Mexicans in derogatory terms and told the regional director that they wanted a more “Ken and Barbie” look for employees at the complex. Finally, the EEOC alleged that the owners expressed frustration over the manager’s pregnancy, claiming that Mexicans always took their full FMLA leave entitlement. The district court dismissed the suit on the basis that these claims were stray remarks and that the employer had demonstrated legitimate performance deficiencies with the manager’s work.

The Fifth Circuit disagreed, reversing the dismissal and remanding the suit for a jury trial. The court noted that these remarks were direct evidence of discriminatory intent made by the owners who instructed the regional director to fire the manager. In terms of the performance issues, the Fifth Circuit noted that the manager had been promoted three months earlier and had not been counseled with regard to these alleged deficiencies.

This case demonstrates the hazards of employers using or tolerating statements that demonstrate direct evidence of bias. Later attempts to characterize the comments as stray remarks will not serve as a convincing defense when those same individuals later take adverse action against the plaintiff, especially where such action is not based on clear, documented performance reasons.