California HR

Religious Discrimination: Employee Wins $6.5 Million Jury Verdict Because of Manager’s Favoritism; Lessons for Employers

A Northern California woman has won a jaw-dropping $6.5 million by convincing a jury that she was passed over for promotion by a supervisor who favored employees belonging to the same religious group as the supervisor. We’ll explain the case and provide pointers for avoiding similar “reverse bias” problems.

Not Promoted

The case involved Lynn Noyes, a permanent software developer at temp agency Kelly Services in Nevada City, which is near Sacramento. When a software development manager position became available, Kelly Services manager William Heinz considered Noyes, Donna Walker, and Joep Jilesen for it. Both Heinz and Jilesen were members of the Fellowship of Friends, a religious organization to which neither Noyes nor Walker belonged.

Heinz had final decision-making authority, but other managers provided input during the selection process. Heinz, however, allegedly told the others that Noyes wasn’t interested in becoming a manager, so they assumed that Noyes was no longer in the running.

Heinz offered the position to Walker, but when she declined it, Heinz offered the job to Jilesen, who accepted. Noyes complained to Kelly Services’ human resources department that she had been passed over despite her superior qualifications; she had worked at Kelly six years longer than Jilesen and held a master’s degree in business administration, which Jilesen lacked. The human resources department allegedly never resolved the complaint.

Ninth Circuit Weighs In

Noyes filed a lawsuit charging reverse religious discrimination under the California and federal antibias laws. Noyes pointed to Heinz’s favoritism toward Jilesen and alleged that four of five management promotions in her office were given to Fellowship members. Kelly Services countered that the promotion decision wasn’t biased and was made through a consensus of the management group.

The suit made its way to the Ninth Circuit Court of Appeals, which ruled last year (see CEA August 2007) that the case should be decided by a jury because of evidence that the company’s proffered reasons for rejecting Noyes were a pretext for religious discrimination. The Ninth Circuit found that although Kelly Services argued that the promotion decision was consensus-based, the other managers couldn’t recall reaching a consensus, and one stated that Heinz ultimately made the decision. The court also pointed to evidence that Heinz’s actions prevented full consideration of Noyes for the job, despite her desire to be a manager and her qualifications.

The Ninth Circuit also cited evidence that Heinz favored Fellowship members and Jilesen in particular. Heinz paid Jilesen a higher salary for the same job Noyes held and often brought in Fellowship members as temporary contractors and gave them management jobs.


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Big Jury Verdict

Now, after deliberating for less than four hours after a four-day trial, a Sacramento federal jury agreed that Noyes was not selected for promotion because she lacked certain religious beliefs held by her supervisor.1 The jury awarded Noyes $647,000 for economic and noneconomic losses, plus a staggering $5.9 million in punitive damages. Kelly Services said it plans to appeal.

Message for Employers

This verdict sends a loud and clear message about the dangers of workplace favoritism based on religion or another protected category, such as race. It also reminds employers of the need to have clear policies to govern employee selection decisions—including oversight by upper management or human resources—and to ensure that those policies are fully communicated to managers. Indeed, an important factor that led to the adverse verdict for Kelly Services was the inconsistency in how decisions were supposed to be made and evidence of how they actually were made, which raised the specter that discrimination seeped into the selection process.

 

1 Noyes v. Kelly Services, U.S.D.C. (E.D. Calif.) No. 2:2002-cv-02685, 2008