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Circuit Court Rules that District Court Should Have Considered HR Manager's Statements in Discri


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In Leanne Renee Kidd v. Mando American Corp, --- F.3d ---- (2013), the 11th U.S. Circuit Court of Appeals ruled that the district court should have considered the admissibility of statements made by the human resources manager of a Korean-owned automobile parts manufacturer before dismissing Kidd’s Title VII employment discrimination claim.

Kidd joined Mando’s accounting department in January 2008 as the accountant in charge of accounts payable. After only a few months in the position, her immediate supervisor was terminated forcing Kidd to assume additional responsibilities without an increase in pay. Despite Kidd’s increased role, Mando did not appoint her or anyone else to fill the assistant accounting manager role. When Kidd attempted to resign, Mando’s accounting manager informed her that Mando did not promote employees until they had been at the company for at least one year. If she was willing to give him six more months he would get her promoted. Kidd acquiesced.

In the spring of 2009, Mando’s president asked Rolison, the human resource manager, to gather candidates for the assistant accounting manager role. Without considering any of the candidates gathered by Rolison or any internal candidates, Mando hired a Korean male, B.W. Seo. When Kidd became aware of Seo’s hiring, Kidd visited Rolison for answers. Kidd alleged that Rolison told her that “they refused to even consider an American candidate” for the position. In September 2010, Kidd resigned from her position claiming a hostile work environment.

Kidd filed two EEOC charges against Mando, one before she resigned and one after. In the first, Kidd complained that she was discriminated against on the basis of her sex and national origin. She based her allegation on the fact that in the 450-person company there were no female managers and that she was passed over for the promotion by a Korean male. In her second EEOC charge, Kidd alleged that she was subject to retaliation because she was constructively discharged and forced from her job after filing her first EEOC complaint.

Kidd proceeded to file a complaint in United States District Court alleging gender discrimination, racial discrimination, and national origin discrimination under Title VII of the Civil Rights Act of 1964, and unlawful retaliation. The district court granted Mando’s Motion for Summary Judgment as to Kidd’s discrimination and retaliation claims. Kidd appealed the district court’s ruling.

The appeals court panel upheld the dismissal of the unlawful retaliation claim. However, they remanded the employment discrimination charge.

Title VII prohibits employers from discriminating against their employees on the basis of their gender or national origin. Kidd contends that she was discriminated against when she was unlawfully demoted and when Mando unlawfully failed to promote her. The appeals court stated that “[b]ecause Kidd suffered neither a decrease in pay nor a loss in title- but only a loss of supervisory responsibilities- she needs to show that her unlawful demotion case is one of those “unusual instances’ where the change in responsibilities was “so substantial and material that it [] indeed altered[ed] the ‘terms, conditions, or privileges of [her] employment.’” “Work assignment claims strike at the very heart of an employer’s business judgment and expertise because they challenge an employer’s ability to allocate its assets in response to shifting and competing market priorities,” the appeals court said. Title VII is not designed to permit federal courts to judge the business decisions of a company. Because Kidd only temporarily managed the accounts payable department and the responsibilities taken away from her were those that she absorbed temporarily, the appeals court ruled that Kidd failed to make out a prima facie case that she suffered an unlawful demotion.

To succeed in a failure to promote case, “the plaintiff needs to show, among other things, that she ‘applied for and was qualified for a promotion.’” Mando never formally posted the position or gave Kidd a chance to apply for the position, so the burden shifts to Mando to articulate a non-discriminatory reason for the employment decision. “The employer’s reason need only be specific enough so that the ‘plaintiff [is] afforded a full and fair opportunity to demonstrate pretext.’” Mando contends that it hired Seo because he had auditing experience which was needed in the accounting department. Because Mando’s reasoning was “objectively reasonable on its face”, the court asked Kidd to come forward with evidence to show that Mando’s reasoning was illegitimate.

The appellate court determined that Kidd’s strongest evidence to rebut Mando’s hiring reason was her testimony that Rolison informed her that Mando “refused to even consider an American candidate” for the position. However, the court can only consider evidence which can be reduced to an admissible form. “It is entirely unclear whether Rolison’s alleged statement…was based on something he observed or heard, or whether it was his own personal opinion,” the panel said. The district court failed to examine the circumstances of Rolison’s statement. If admissible, Rolison’s statement would cause factual questions that would make a motion for summary judgment improper. Therefore, the appeals court ruled that the district court erred in dismissing Kidd’s employment discrimination claim without first determining the admissibility of Rolison’s statement.

Kidd’s claim for relief now hinges on whether the district court will rule the statement as admissible. If the statement is admissible, there is sufficient evidence to raise a factual dispute regarding the legitimacy of Mando’s reason for hiring Seo and the case will proceed to trial. But, if the district court rules the statement inadmissible, then summary judgment should be granted in Mando’s favor.

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