Anatomy of an employment lawsuit: best HR practices to help you win

by Michael J. Modl

Imagine you employ Rajesh Tank, an employee of Indian descent, as a regional VP. Other employees report that Tank engaged in unprofessional conduct that hurt team morale, showed favoritism toward certain employees, and pressured employees to hire a particular contractor. You investigate the allegations, find some truth to them, order Tank to terminate the contractor, and place him on a corrective action coaching plan. 

Tank then reports inappropriate racial workplace comments and objects to the level of discipline meted out to the employee who made the comments. He engages in unprofessional conduct after being placed on the corrective plan, and despite your request that he terminate the contractor, he doesn’t. He also raises concerns that he is being discriminated against in the workplace. As a result of coworkers’ complaints about him, you conduct a second investigation and conclude that discharge is the appropriate course of action.

Not surprisingly, Tank sues you, claiming (1) his discharge was based on his national origin, (2) he was discharged in retaliation for his complaints about discrimination, and (3) he was paid less than other VPs who aren’t Indian. In the actual case involving these facts, the employer, T-Mobile, prevailed on all of the claims because it followed solid HR practices. Unfortunately, this type of employee isn’t unusual. Let’s look at what this employer did right that resulted in a favorable court decision.

Discrimination claim

T-Mobile’s stated reasons for Tank’s discharge were that he (1) allowed a subcontractor to return to work on a project in defiance of his boss’s directive, (2) authorized questionable expenditures of T-Mobile funds for his apparent personal gain without prior approval, and (3) engaged in favoritism among his staff. Tank’s primary discrimination claim was based on his argument that he was fired because of his national origin, but he also suggested that he was subjected to workplace harassment because of his Indian descent. In addressing his harassment claim, T-Mobile’s HR department made the following right moves:

• When notified of racially insensitive comments by another employee, the company conducted a prompt investigation. It’s critical to not unduly delay an inquiry when employees raise concerns about potentially illegal harassment in the workplace.
• An unbiased and experienced person conducted the investigation.
• The company took appropriate remedial action when it determined that inappropriate conduct had occurred. The offending employee was put on a corrective action plan. Tank complained that the employee should have been fired. While it’s true that the employer gets to determine what the appropriate level of discipline is, be consistent when you discipline employees who engage in similar conduct.

Tank also raised a number of concerns about how T-Mobile handled his discharge. The court rejected all of his discriminatory discharge allegations, finding the employer’s practices appropriate and citing the following facts:

• The employer promptly investigated coworkers’ concerns about Tank’s inappropriate, unprofessional, and insubordinate behavior.
• The employer clearly and thoroughly documented the concerns raised by employees as well as the steps of its investigation into their concerns. We cannot overemphasize the importance of good documentation. Many employee lawsuits have been thrown out by courts based on an employer’s contemporaneous documentation.
• The employer followed its policies and procedures when it conducted the investigation. Tank complained that his employer failed to follow its own investigatory policies, which was evidence of discrimination. In many cases, courts will rely on an employer’s failure to follow its own policies as evidence of discrimination or retaliation. Here, the court found that T-Mobile had complied with its policies.
• The employer was consistent in the level of discipline it imposed. HR 101 teaches us that it’s critical to treat similarly situated employees the same. Tank claimed that other regional VPs received less severe discipline than he did. The court found that the employees he identified weren’t similarly situated to him because they had engaged in different types and numbers of workplace violations.

Retaliation claim

Tank also sued his employer for unlawful retaliation. He claimed that shortly after he complained about discriminatory conduct, he was investigated for wrongdoing and then fired. To prove unlawful retaliation, an employee must show that (1) he engaged in protected conduct, (2) he suffered an adverse employment action, and (3) the adverse employment action occurred because he engaged in the protected conduct.Timing is one of the primary types of proof employees rely on in retaliation claims. The closer in time to the protected conduct an adverse employment action is, the stronger the employee’s potential retaliation claim. Although courts are sensitive to timing evidence, timing by itself typically won’t be enough to establish retaliation, except in rare circumstances. In this case, T-Mobile received complaints about Tank’s unprofessional conduct that it needed to investigate. An employer cannot put off an investigation simply because it may also be looking into concerns raised by the accused employee.Employers must also follow established policies for who should be involved in workplace investigations. Tank complained that HR shouldn’t have overseen the investigation of his coworkers’ concerns about him. However, T-Mobile’s policy allowed for HR involvement, and there was nothing suspicious about HR overseeing the investigation.

The court also rejected Tank’s argument that T-Mobile’s justification for his discharge was pretextual, or not worthy of belief. He argued that the reason given by the company for his discharge changed. Although shifting reasons can be proof of pretext, the court found that T-Mobile’s primary reason for Tank’s discharge remained the same in this case.

Pay discrimination

Tank claimed that he was paid less than others in the regional VP position and the pay differential was based on his national origin. The court found that he wasn’t similarly situated to the VPs who were paid more than he was.

It’s appropriate to consider factors such as past work experience, job qualifications, educational background, and achievements within the company when setting pay. It’s also proper to consider the employee’s geographic location when deciding his compensation level. Tank v. T-Mobile USA, Inc., No. 13-1912 (7th Cir., July 10, 2014).

Bottom line

As this case illustrates, employees will often combine all manner of claims in a single lawsuit in an effort to find some claim that may stick. Here, Tank asserted discrimination, retaliation, and discriminatory pay claims, but the employer’s HR practices ultimately carried the day. Although you may not be able to prevent a current or former employee with the $400 filing fee from suing you, ensuring that you engage in solid HR practices can greatly reduce your risk of an adverse verdict.

Mike Modl is a partner with Axley Brynelson, LLP’s labor and employment practice group in Madison, Wisconsin. He may be contacted at mmodl@axley.com.

• Wisconsin Employment Law Letter
  Excerpted from Wisconsin Employment Law Letter and written by attorneys at the law firm of Axley Brynelson, LLP. WISCONSIN EMPLOYMENT LAW LETTER is intended only to inform, but not to provide legal advice, and recipients should seek professional advice with regard to specific applications of the information. Contact attorneys at Axley Brynelson, LLP.