Employee wins round two

By Jennifer L. Lippi

A California employer is stinging from a reversal in a trial court’s summary judgment ruling that a termination for unsatisfactory performance was defensible enough to withstand the employee’s charge of age discrimination and unlawful termination. The employer’s failure to follow its own performance standards and the absence of supporting documentation cost them substantial dollars in time and legal fees to defend this case. And it’s not over yet as the case has been remanded back to the trial court.  A California Court of Appeal ruled in Cheal v. El Camino Hospital that the employee raised triable issues of fact with respect to whether she was performing adequately at the time of her discharge, and whether the discharge was the product of age discrimination. 

Carol Cheal, age 61, was a dietary technician with El Camino Hospital for over twenty years until her termination in October 2008 at the age of 61.  Cheal had received positive performance reviews through August of 2007.  In July of 2007, the hospital hired Kim Bandelier as the new nutritional services supervisor.  By January 2008, Bandelier was accusing Cheal of numerous shortcomings.  On April 14, 2008, Bandelier gave Cheal a written warning for failure to conform to hospital procedure.  In June, Bandelier issued a second “final” warning.  In September, Bandelier accused Cheal of incorrectly preparing special menus for a patient on a restricted diet.  In October, the hospital terminated Cheal.

Cheal sued the hospital, alleging age discrimination, wrongful demotion and termination, failure to investigate and take corrective action against age discrimination, and retaliation for complaints of unlawful discrimination.  The trial court ruled that since Cheal “made several mistakes on menus between January and May in 2008,” she would not be able to show that she performed her job in a satisfactory manner. The trial court also found that Cheal did not provide substantial evidence that the hospital acted with discriminatory intent when it fired her.

The Court of appeal reversed.  It held that there were issues of fact with respect to whether Cheal was performing adequately at the time of her termination and whether there was discriminatory bias against older workers on the part of Cheal’s immediate supervisor.  It was the hospital’s own documents that provided the basis for the court’s conclusion that Cheal had produced enough evidence for her competent performance.  The court found that an employer does not conclusively establish the standard of competence in an employment discrimination action by simply asserting the employees performance was “less than satisfactory.” 

The hospital’s printed evaluation form for the diet technician position, which allowed an acceptable rate for certain types of errors, was key evidence in support of Cheal’s case.  The evaluation form showed that the hospital expected diet technicians to make at least some errors.  For example, the hospital’s form set levels of acceptable performance of “less than one error per day” for menu writing skills and “less than two errors per meal” with respect to meal tray checking skills.  Thus, the court found that the hospital, under its own written policies, anticipated and expected mistakes because given the nature of the work, they were inevitable on an almost daily basis.

The hospital also offered no evidence quantifying either the number or severity of Cheal’s alleged mistakes.  The hospital went to lengthy efforts to show that the errors attributable to Cheal were unacceptably serious because they involved issues of patient safety.  However, the court took note that the hospital did not analyze the seriousness of the errors or how Cheal’s performance compared to other employees.

If that were not enough, the hospital was also guilty of another documentation problem.  It gave Cheal a “summary of prior warnings,” which consisted of an e-mail from Bandelier that listed 16 different coachings she had give to Cheal over the year.  The summary of warnings was lacking in detail as it was sent to Cheal long after the alleged “coachings” had occurred.  Cheal refuted the document claiming many of the coachings never occurred, were unrelated to a breach of standards, or were merely updates of information provided to all staff. 

Finally, there were problems with the hospital’s case, not directly related to its documentation, including evidence of a discriminatory admission by Bandelier that she favored “young” employees, and evidence that there were similarly situated employees who made similar mistakes without consequence. This led the court to conclude that Cheal had enough evidence to get to a jury on the issue of discriminatory motive.

So here are some takeaways (from our perspective): 

  1. Employers should audit all forms used to measure performance and make sure they accurately reflect the actual practice and standards. 
  2. Employers should ensure that all employee discipline is well documented in a contemporaneous manner and applied consistently.  Cheal makes it clear that unequal discipline can lead to an inference of discrimination. 
  3. Where you have a long-term employee with a history of positive reviews, make sure there is not another issue impacting their performance, such as a medical condition or a new supervisor who is showing bias.

Contact your employment counsel or HR consultant when you have questions about discipline and discharge issues. As the Cheal case demonstrates, it is a minefield and can cost employers a bundle even when you have meticulous documentation and policies in place.

You may read the Cheal case here.

Of course, this is not to be considered legal advice.  Just a “quick and dirty” update for laypersons.

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