Most employers know that consistent application of internal policies and job standards can prevent discrimination and retaliation claims. This is particularly important because plaintiffs seeking to make such claims must establish that the employer treated “similarly-situated” persons outside their protected group more favorably.

The question, of course, is what the term “similarly situated” actually means. In short, employees are similarly situated where they “have similar jobs and display similar conduct.” The “employees need not be identical, but must be similar in material respects.” Two recent federal court decisions demonstrate the dangers of inconsistent application of employment policies and procedures to similarly-situated employees.

Zeinali v. Raytheon Company

In Zeinali v. Raytheon Company, Raytheon hired Hossein Zeinali as an engineer. Zeinali was of Iranian descent. Zeinali’s initial position required him to have a “secret” level security clearance. Zeinali did not have the clearance when hired. Raytheon informed him that his continued employment was contingent on obtaining the clearance.

Four years later, Raytheon fired Zeinali after the Department of Defense denied his request for secret-level security clearance. Zeinali then sued Raytheon for race and national origin discrimination.

Raytheon claimed that a proper security clearance was a requirement of Zeinali’s job, and his failure to obtain one barred his claim. But Zeinali introduced evidence that two other Raytheon engineers – neither of whom was Middle Eastern or Iranian – continued to work for Raytheon years after their security clearances were revoked. The district court granted Raytheon’s motion for summary judgment, but Zeinali appealed to the Ninth Circuit Court of Appeals.

The appellate court reversed and permitted Zeinali’s claim to go to trial. The Ninth Circuit concluded that Raytheon’s purported reason for terminating Zeinali’s employment could have been a pretext for unlawful discrimination. In the court’s view, Raytheon would “certainly be justified in firing employees who lack security clearances, but only if this criterion is applied alike to members of all races.” Zeinali had introduced sufficient evidence of inconsistent application of the policy to create a factual dispute requiring trial.

Raytheon argued that Zeinali’s examples of inconsistency were not relevant because the other employees’ security clearances were “revoked” after an initial approval, and Zeinali never obtained approval. The court was not persuaded because Raytheon failed to present “evidence or analogous legal authority to explain how a clearance ‘revocation’ is materially different from a clearance ‘denial.'”

This opinion is significant for a few reasons. First, the court rejected the notion that a plaintiff’s inability to satisfy job requirement imposed by a third party (the Department of Defense in this case) is not a bar to a discrimination claim if the plaintiff can prove that the job requirement is not enforced. Second, the court did not point to any other evidence of discrimination other than the allegedly inconsistent application of the security clearance requirement. In other words, the court permitted the plaintiff to proceed to trial based on a “prima facie” case of discrimination without providing additional evidence of “pretext.”

Earl v. Nielsen Media Research

The Ninth Circuit addressed similar circumstances in Earl v. Nielsen Media Research. In that case, Christine Earl worked as a recruiter for Nielsen Media Research – the television ratings company – for 12 years. After violating company policies on multiple occasions, Nielsen put Earl on a Developmental Improvement Plan (“DIP”). A DIP is a non-disciplinary tool used to notify an employee that his or her performance has fallen below Nielsen’s standards. In contrast, a Performance Improvement Plan (“PIP”) is part of the company’s disciplinary process.

Subsequently, while on assignment, Earl obtained consent from a household to track its television viewing. She violated company policy, however, by failing to verify the household’s address. Two months later, Nielsen discovered Earl’s error and terminated her employment. Earl was 59 years old at the time, and she sued for age discrimination.

Earl presented evidence that recruiters in their 30s and 40s repeatedly violated similar Nielsen polices, but were not fired. The Ninth Circuit concluded that Earl demonstrated pretext by presenting “specific and substantial evidence that Nielsen did not terminate significantly younger recruiters with similar histories of multiple policy violations.”

Earl further demonstrated pretext by showing that Nielsen deviated from its usual disciplinary procedures when dealing with a younger recruiter. In that instance, the head of Nielsen’s HR department wrote in an email exchange with other officials, “As much as it sounds reasonable to terminate him without a PIP, it would not be consistent with our procedure.” Nielsen eventually issued the younger employee a PIP and terminated his employment. According to the court, however, the fact that Earl was fired before being given a PIP showed that Nielsen used a “more lenient disciplinary process . . . for younger recruiters . . . .”

Tips for Employers

These cases illustrate what happens when well-intentioned employers implement policies designed to ensure consistent treatment, and then fail to follow them. Management should consider whether they can live with self-imposed restrictions on their discretion. Perfect consistency in the application of policies and rules is close to impossible. But management should be ready to justify the exceptions they make. Raytheon apparently did not do so, at least not convincingly.

Although a properly drafted progressive discipline policy likely will not affect “at will” employment status, these policies can and will be used against employers, as the Earl decision makes clear. Again, depending on the circumstances, it may be appropriate to use a performance improvement plan for one employee, but not another. That said, though, managers should be ready to offer specific reasons why they departed from the normal practice.

There are additional ways to help employers apply performance standards and policies more consistently. Depending on an organization’s size and resources, these can include review of critical discipline decisions by an individual or group familiar with similar situations, and databases permitting human resources managers to review previous situations for guidance. Employers seeking to prevent unlawful discrimination claims by implementing policies designed to promote consistent treatment should consult with competent employment law counsel.

X