In Cadet v. Deutsche Bank Securities, 11-cv-7964, 2013 WL 3090690 (SDNY June 18, 2013), decided on June 18, 2013, the Southern District of New York (McMahon, J.) denied defendants’ motion for summary judgment as to plaintiff’s race discrimination claims brought under Title VII of the Civil Rights Act of 1964 and 42 U.S.C. 1981, but dismissed his hostile work environment claims.
This and similar cases underscore the fact-intensive nature of a discrimination analysis and the nature and quantity of evidence sufficient to defeat a defense motion for summary judgment, which is often the last hurdle a plaintiff needs to clear en route to a jury trial.
The case arose out of plaintiff’s resignation allegedly due to race discrimination he endured while employed at defendant.
1. Race Discrimination
In evaluating plaintiff’s race discrimination claims, the court applied the familiar burden-shifting framework of McDonnell Douglas Corp. v. Green. Under that framework:
First, the plaintiff must establish a prima facie case by proving that he: (1) is a member of a protected class; (2) was qualified for his position; (3) was subject to an adverse employment action; and (4) suffered under circumstances giving rise to an inference of discrimination. [A]lthough in certain circumstances a Title VII claim may be established through proof of a defendant’s mere negligence, without a showing of discriminatory intent, a plaintiff pursuing a claimed violation of § 1981 must show that the discrimination was intentional.
If the plaintiff succeeds in establishing his prima facie case, the burden shifts to the employer to offer a legitimate, non-discriminatory reason for its challenged action.
If the employer does so, the McDonnell Douglas presumptions disappear. In a race discrimination case, the plaintiff must then adduce sufficient evidence to support a reasonable inference that discrimination occurred. The relevant factors in this determination include the strength of the plaintiff’s prima facie case, the probative value of the proof that the employer’s explanation is false, and any other evidence that supports the employer’s case.
It was undisputed that plaintiff satisfied the first two elements of the prima facie case, namely, that he was a member of a protected class (African American) and that he is qualified for his position.
Plaintiff alleged that defendants discriminated against him on the basis of his race in the following ways:
(1) downgrading Plaintiff’s 2007 and 2008 performance scores by giving him a 3 (“meets expectations”) in a handful of categories; (2) giving Plaintiff lower bonuses in 2007 and 2008 than were originally recommended, and lower bonuses than white and other non-black Associates; (3) denying Plaintiff training, mentoring, and advancement opportunities (elsewhere, Plaintiff describes this allegation as a denial of “coaching”); (4) not assigning Plaintiff to “live” deals that he had helped to pitch; (5) harassing Plaintiff verbally; (6) refusing to provide Plaintiff with sufficient Analyst support; (7) failing to promote Plaintiff to Vice President (“VP”); and (8) not allowing Plaintiff to rescind his resignation.
The court found genuine issues of material fact as to whether items 1 (performance appraisals), 2 (bonuses), 3 (coaching), 4 (live deals), and 6 (analyst support) – all of which were “adverse employment actions” – were the product of race discrimination.
As to plaintiff’s performance appraisals, plaintiff argued that his (relatively good) performance score would have been higher but for de Castro’s (the “staffer” for plaintiff’s group) decision to grade him 3 out of 5.
Plaintiff relied on three allegedly “racially-tinged” comments, namely,
1) a gesture made in reference to plaintiff that plaintiff took as a reference to the “Black Power” movement,
2) de Castro’s “sarcastic” remark that Martin Luther King Day is “only a holiday for some people”, and
3) de Castro’s remark that he was “100% white” and that his dark skin was a result of excessive skin exposure as a child which plaintiff interpreted as evidence that de Castro “denied” and “was ashamed of” his mixed ancestry.
The court held that this was enough to create a genuine issue of material fact:
The circumstances that give rise to an inference of discriminatory motive include remarks made by decision makers that could be viewed as reflecting a discriminatory animus. While it is not at all obvious that de Castro’s remarks evinced any racial animus … the task of disambiguating ambiguous utterances is for trial, not for summary judgment. Moreover, I am compelled to view the record in the light most favorable to Plaintiff and draw all reasonable inferences in his favor.
Defendants assert that de Castro felt his scores were justified in light of Plaintiff’s actual performance. Whether that is pretextual is for the jury to decide.
Next, as to plaintiff’s bonuses, plaintiff argued that “despite his high performance appraisals, he was consistently placed in the lowest band for bonuses on account of his race” and that his superiors “manipulated the Associate Bonus Committee’s final determination of his bonus.” This, according to the court, “was undoubtedly an adverse employment action.”
The court next outlined plaintiff’s evidence in support of this claim:
Plaintiff offers more evidence to support his bonus claim than he does to support his performance appraisal claim. In addition to de Castro’s ambiguous, potentially racially-tinged remarks, Plaintiff points to ample evidence that there were racial disparities in how bonuses reflected performance appraisals at DBSI—i.e., white and other non-black Associates received higher bonuses than did black employees, and those bonuses were correlated with their high performance appraisals. Plaintiff also offers evidence that the Committee initially recommended that he receive a higher bonus than he got, and that Cunningham may have had a role in downgrading him. By contrast, Cunningham allegedly increased a non-black banker’s bonus. Finally, Mansour Cortes, the only other black banker in the Lat Am Group during Plaintiff’s tenure, testified that his “bonuses did not reflect [his] actual work performance and should have been higher,” thereby corroborating Plaintiff’s account that bonuses were doled out in a racially suspect manner at DBSI.
Defendants counter that bonuses were ultimately decided by the Committee, not by de Castro and Cunningham, who did not sit on the Committee. The Individual Defendants did make presentations to the Committee concerning Plaintiff’s performance, but de Castro testified at his depositions that he “fought” and “advocated” for Plaintiff in front of the Associate Bonus Committee. Cunningham, for his part, could not recall what he said to the Committee. Defendants also note that performance appraisals were only part of the bonus calculation, and the Committee carried out its own due diligence in reaching a final number.
However, this merely demonstrated that there was a genuine issue of material fact that was required to be submitted to the jury.
Plaintiff argued that his superior, de Castro, “refused” to assign him to “live deals that he had been instrumental in pitching” for defendant, “when it was customary for those heavily involved in the pitch to also be assigned to the deal’s execution.”
Under the law, “[a]ssignment (or lack of assignment) qualifies as an adverse employment action, since such exposure was integral for career advancement.”
Here, too, plaintiff sustained his summary judgment burden:
Plaintiff comes forward with evidence from which a jury could reasonably infer that Plaintiff’s lack of live deal exposure was motivated by his race: de Castro’s racially-tinged remarks, coupled with Cortes’s corroboration of Plaintiff’s assertion that live deal exposure was meted out by race.
Defendants’ proffered race-neutral explanation merely gave rise to summary judgment-defeating issues of fact:
Defendants have come forward with a race-neutral explanation for de Castro’s failure to assign Plaintiff to certain deals that he had been involved in pitching—namely, that the Lat Am Group’s resources were limited, particularly with respect to Associates, of which Plaintiff was the only one for a substantial period of his employment. As a result, personnel who helped to pitch certain deals could not always be staffed to those deals.
If credited by a jury, this explanation would indeed defeat Plaintiff’s discrimination claim with respect to his live deal exposure. However, all Defendants have done is demonstrate once again that there is a genuine issue of material fact as to whether de Castro discriminated against Plaintiff in not assigning him to deals that he had pitched.
Plaintiff asserted that de Castro regularly denied him assistance from Analysts, which forced him “to perform the work of both an analyst and an associate.”
Plaintiff identified only one incident where this occurred, which according to the court would probably not be enough to defeat defendants’ motion.
However, the only other African American banker in plaintiff’s group testified that plaintiff received analyst assistance “sporadically”, while other non-black associates “always got the assistance they required.” Plaintiff’s claims were also supported by de Castro’s arguably racially tinged comments.
Plaintiff thus presented enough evidence to demonstrate a genuine issue of material fact, notwithstanding defendants’ citation of the “lack of manpower” in plaintiff’s group as the reason why plaintiff didn’t always get the necessary support.
Lastly, plaintiff alleged that de Castro denied plaintiff coaching, mentoring, and positive encouragement that was not denied to non-black bankers. This claim was likewise corroborated by plaintiff’s black co-worker. Thus, plaintiff demonstrated that there was a genuine issue of material fact as to whether de Castro’s alleged failures in mentoring constituted race discrimination.
2. Hostile Work Environment
The court reached the opposite conclusion with respect to plaintiff’s hostile work environment – i.e., harassment – claims.
It found that “[w]hile some or all of the discrete acts outlined above could constitute discrete instances of race discrimination in employment, neither singly nor taken together do they add up to a hostile work environment.”
The law provides:
The hostile work environment theory of race discrimination … provides a remedy for employees who experience behavior that manifests discrimination, not through discrete adverse employment actions, like those cited by Plaintiff, but by teasing, harassing, ridiculing, and insulting someone because of his race. To establish the existence of a hostile work environment, the plaintiff must demonstrate that “the workplace is permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment. A jury must be able to conclude that the work environment both objectively was, and subjectively was perceived by the plaintiff to be, sufficiently hostile to alter the conditions of employment for the worse.
Courts look to the totality of the circumstances in determining whether a plaintiff has established a hostile work environment claim, considering factors including ‘the frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance. [M]ere utterance of an epithet which engenders offensive feelings in a employee does not sufficiently affect the conditions of employment to implicate Title VII. Similarly, conduct that is merely offensive, unprofessional, or childish cannot support a hostile work environment claim. Nor can offhand comments, isolated incidents, stray remarks, or [the plaintiff’s] subjective belief constitute a viable claim.
Furthermore, because a hostile work environment claim is, in effect, an aggravated verbal or physical harassment claim, no such claim can survive a motion for summary judgment if the record does not contain evidence of verbal or physical harassment.
The court distinguished hostile work environment claims from what it characterized as “simple” discrimination claims:
The fact that Plaintiff has raised a genuine issue of material fact concerning discrete instances of discrimination does not mean that he has raised a genuine issue of fact on the issue of whether DBSI was a hostile work environment. The standard for establishing a hostile work environment is different (and arguably higher) than that for a simple discrimination claim.
The conduct identified by plaintiff – for example, that de Castro “looked unhappy” if plaintiff made a comment, told plaintiff and others that they “wouldn’t make it at Morgan Stanley”, openly “spoke badly” about plaintiff to the group, and “loudly” said to the group that plaintiff’s work on a model was slow – were “at best, merely offensive, unprofessional, or childish, and thus cannot support a hostile work environment or harassment claim.”
Specifically, de Castro’s three “racially tinged” comments were also insufficient to support a hostile work environment claim, since he made only three such comments over the course of plaintiff’s nearly three years of employment. According to the court, this is the “very definition of ‘stray remarks’ or ‘isolated incidents’ that do not demonstrate a pervasive pattern of racial harassment.”
3. Resignation-Related Claims
The court also dismissed plaintiff’s resignation-related claims, namely, that (1) his resignation was involuntary and was the product of a constructive discharge, and (2) defendants discriminated and retaliated against him by not allowing him to rescind his resignation.
First, there was no constructive discharge. The standard for that claim is high:
Constructive discharge of an employee will occur only when an employer, rather than directly discharging an individual, intentionally creates an intolerable work atmosphere that forces an employee to quit involuntarily … Working conditions are intolerable if they are so difficult or unpleasant that a reasonable person in the employee’s shoes would have felt compelled to resign. Creation of a hostile work environment is a necessary predicate to a hostile-environment constructive discharge case such as this one, where Plaintiff bases his constructive discharge claim on the same conduct as his hostile work environment and harassment claims.
Plaintiff’s constructive discharge claim failed, because (1) his attempt to rescind his resignation “severely undermines any inference that [defendant] had become such as hostile work environment that plaintiff felt compelled to resign” and (2) he failed to raise a genuine issue of material fact as to his hostile work environment claim.
Second, defendant’s refusal to allow plaintiff to rescind his voluntary resignation was not an “adverse employment action”, which is a necessary predicate to either a status-based discrimination or retaliation claim:
An adverse employment action in the discrimination context is a materially adverse change in the terms and conditions of the plaintiff’s employment. In the retaliation context, the definition of an adverse employment action is broader: a plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.
Federal courts across the country have held that the refusal to allow rescission of a voluntary resignation does not constitute an adverse action.The reason for this is simple: employers are not usually obligated to allow their employees to rescind their resignations. Indeed, there is a presumption under New York law that employment is at-will, and thus terminable at any time by either party. Thus, in the absence of a duty to permit an employee to rescind his resignation, it is not an adverse employment action—for the purposes of a discrimination claim or a retaliation claim—for an employer to take the employee at his word that he wants out and not reinstate him if he changes his mind.
The court rejected plaintiff’s to get around this by arguing that when he retracted his resignation while he was still employed, and defendants’ refusal to accept the retraction was “itself retaliatory after he learned in the interi” that plaintiff complained about discrimination:
Nothing in the case law suggests that an employee is entitled to some kind of grace period during which he is free to reconsider his resignation or that an employer is obligated to allow him to rescind if he does so within a brief period of time. Here, Cunningham did give Plaintiff an opportunity to reconsider his resignation, and Plaintiff decided to submit it anyway! And even granting Plaintiff the benefit of assuming that (1) he did in fact complain about race discrimination to Shtainer, (2) she communicated Plaintiff’s concerns to Cunningham, and (3) Cunningham had the authority to reinstate Plaintiff—all of which is disputed—there is still nothing in the record that rebuts the presumption that Cunningham had no obligation to permit Plaintiff—an at-will employee who as a matter of law had not been constructively discharged—to rescind his resignation, or even to pass along his desire to do so to senior management. This Court will not impose obligations that do not otherwise exist under the law.
The court therefore concluded that because plaintiff’s resignation was voluntary and not a result of coercion or duress, there was no constructive discharge and defendants’ failure to accept plaintiff’s rescission of that voluntary resignation was not an adverse employment action.
4. Failure to Promote
The court also rejected plaintiff’s claim that defendants’ failure to promote him amounted to race discrimination.
“To survive summary judgment on a failure to promote claim, the plaintiff must come forward with evidence that (1) he is a member of a protected class; (2) he applied and was qualified for a job for which the employer was seeking applicants; (3) he was rejected for the position; and (4) the position remained open and the employer continued to seek applicants having the plaintiff’s qualifications.”
Plaintiff argued that if he remained employed at defendant, he would have become eligible for promotion to vice president. This was simply a repeat of his argument relating to defendants’ failure to allow him to rescind his resignation, which the court already rejected.
Since plaintiff quit his job before he became eligible for a promotion, he had no failure to promote claim. Put bluntly, the “law does not recognize a claim for ‘possible future failure to promote.'”
5. Individual Liability of Managing Director Stephen Cunningham
Finally, the court found genuine issues of material fact as to whether Cunningham (who is white) discriminated against plaintiff by manipulating his bonuses, in violation of Section 1981.
This was so, notwithstanding evidence that plaintiff continued to send Cunningham birthday and anniversary greetings after plaintiff’s departure and the “presumption of nondiscrimination that arises where the same supervisor is involved in both the decision to hire and the alleged discriminatory act.”
That was, according to the court, “an argument more properly made to a jury.”