Head-Office decision won’t insulate company from liability — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Head-Office decision won’t insulate company from liability

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in Discrimination and Harassment,Firing,Hiring,HR Management,Human Resources,Leaders & Managers,Performance Reviews

Don't think that leaving the final firing decision to someone in company headquarters will shield your organization from a discrimination lawsuit. Even if the ultimate decision-maker doesn't know the race, sex or age of the employee in question, the fired employee can still file a discrimination claim if he or she can point to lower-level bias that tainted the decision.

Courts typically look for biased actions by the "decision-maker." But conceivably anyone who influences an employment decision—even if he or she doesn't have hiring/firing authority—can be deemed decision-makers in the eyes of the court.

For that reason, it's important to remind supervisors that it's their job to make sure discrimination doesn't taint any part of the hiring and firing process, including performance reviews conducted by lower-level managers.

Recent case: Stephen Peters, an African-American, delivered Coca-Cola products to stores. When his supervisor told him to work on his day off, he refused and called in sick. The supervisor reported the incident to HR at Coca-Cola's headquarters. The company then fired Peters for insubordination after taking a quick look at his file and noting an earlier refusal to work.

Peters sued for race discrimination. The HR rep at headquarters testified that she didn't know Peters' race and didn't do an investigation or ask Peters his side of the story. (In fact, he was ill and had a doctor's excuse for that final absence. And other testimony showed that the supervisor wasn't as harsh on other employees.)

The court sided with Peters, ruling that even if the ultimate decision-maker didn't know his race, the company could be held responsible for a low-level manager's discriminatory referral for discipline unless the decision-maker investigated before making a decision. (EEOC v. BCI Coca-Cola Bottling, No. 05-2220, 10th Cir., 2006)

Final note: The EEOC has recently pushed the theory that a sole decision-maker who doesn't know an employee's race can still be responsible for discrimination on the theory that the employer is liable for the acts of a biased subordinate. As this case shows, the agency is making headway with this theory.  

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