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Discrimination Liability Case Off Supreme Court Docket

April 19, 2007

A closely watched discrimination case that the Supreme Court had been scheduled to hear April 18 has been withdrawn, leaving unresolved, for the moment, the question of whether a company can be held liable for discrimination by a subordinate supervisor, even if a higher-ranking official makes an employment decision unaware of the alleged bias.

BCI Coca-Cola Bottling v. EEOC was supposed to be argued before the high court last week. On April 12, however, BCI asked the court to dismiss the case, even though it has not reached an agreement with the Equal Employment Opportunity Commission, which is suing BCI on behalf of an employee at the company’s Albuquerque, New Mex­ico, operation. The action will be re­manded to district court in New Mexico.

The employee, Stephen Peters, was dismissed in 2001 after failing to work on a special promotional weekend. His supervisor, Cesar Grado, told the human resources department in Phoenix that Peters had been insubordinate, but he did not recommend termination. Peters was fired by an HR manager after she reviewed Peters’ file.

Peters sued, alleging that Grado was racially biased. The HR office did not know that Peters was African American.

The trial court ruled against Peters on summary judgment, saying he didn’t prove that Grado’s alleged discrimination influenced an employment decision made at a higher level of the company. The 10th Circuit Court of Appeals, however, found that Peters should get a trial. And now that the case has been removed from the Supreme Court’s docket, that’s what will happen.

“The withdrawal of this case represents a real loss to the employer community, the HR profession and to employees, because we missed an opportunity for the Supreme Court to clarify what has clearly been a debate amongst the appellate circuits around the country,” says Manesh Rath, a partner at Keller and Heckman in Washington.

Observers point out that there are two similar cases in the Supreme Court pipe­line, one involving a white professor being denied tenure at a historically black college.

“If they’re inclined to look at this issue of law, they can do it,” says Michael Foreman, deputy director of legal programs for the Lawyers’ Committee for Civil Rights Under Law.

When the court weighs in on the controversy, it could have a profound impact on discrimination cases.

If the Supreme Court adopts the 10th Circuit stance, it will “short-circuit the plaintiff burden” because someone alleging discrimination would not have to prove that the person making the decision was biased, Rath says.

“That’s a change in what the plaintiff had to prove for 35 years,” he says.

If the Supreme Court takes a position similar to the one outlined in the summary judgment, it would allow employers to create “a structure of plausible deniability” to avoid complying with anti-discrimination statutes, Foreman says.

“It would dramatically undermine the purposes of Title VII,” he says.

Foreman asserts that if ra­cism contributes to adverse employment impact, it doesn’t matter where the bias occurs within the company hierarchy. The point is to eradicate it everywhere.

“We want it out of the employment decision,” Foreman says.

But Rath says those decisions can be made free of discrimination by someone in the HR office, who may not know that bias existed somewhere else in the organization.

“These things don’t come to light except through the microscopic scrutiny of litigation,” Rath says.

Mark Schoeff Jr., Workforce Management staff writer