Court Rejects Age and Gender Bias Claims

A federal appellate court recently found that an employee who was fired for insubordination was not meeting an employer’s legitimate business expectations after she engaged in arguments with her co-workers, the general manager, and the owner of the business. The Seventh Circuit Court of Appeals further found that the insubordination was a non-discriminatory reason that overcame the employee’s claim that her termination was a “pretext” for discrimination. Everroad v. Scott Truck Systems, Inc., No. 08-3311, Seventh Circuit Court of Appeals (May 10, 2010).

Factual Background

Scott Truck Systems, Inc. is a family-owned and operated commercial trucking company. Diana Everroad was hired as a dispatcher in 2004 – at the age of 51 – by Sherry Hantzis, the general manager and wife of the owner, David Scott. Within the first months of her employment, Everroad experienced conflicts with her co-workers, and two of the company’s largest customers complained about her.

Scott and Hantzis ultimately moved Everroad from the dispatcher position to a newly created “data administrator” job with the same pay and hours, but with a more flexible schedule. In her new position, Everroad worked in close proximity with a younger female employee who, according to Everroad, overused the phone for personal calls.

She complained to Scott and Hantzis, who met with Everroad and the co-worker to attempt to resolve the issue. The court later colorfully described the meeting: Voices were raised, accusations were exchanged, tears were shed, and eyes were rolled.”

Upset by Everroad’s antics, and concluding that Everroad had been insubordinate, Scott and Hantzis decided to terminate her employment. When they informed her of that fact, Everroad told Scott that he and his wife were “nuts, crazy, insane” and “sick” and called Hantzis a “f___ing bitch.” Later that evening, Everroad called Scott, asking for severance pay. Scott denied her request.

Shortly thereafter, Everroad filed a federal lawsuit against her former employer and Hantzis. Everroad claimed that she had been discriminated against because of her age and gender, and that she was retaliated against for reporting illegal bias.

Legal Analysis

The lower court granted summary judgment in favor of the defendants, and that decision was upheld on appeal. The Seventh Circuit Court of Appeals found that Everroad’s insubordination undermined the discrimination claims in two ways: first, insubordination precluded Everroad from proving that she “met her employer’s legitimate job expectations,” which is an element of the required prima facie case; second, insubordination is a non-discriminatory reason for termination, which meant that Everroad was unable to show that the company’s actions were simply a pretext for discrimination.

Further, although Everroad claimed that she was treated differently than “similarly situated” male/younger employees, she was unable to show that anyone else had been similarly insubordinate and treated more favorably. As a result, her lawsuit was dismissed.

Practical Impact

According to Charles Baldwin, a shareholder in Ogletree Deakins’ Indianapolis office: “Insubordination is a non-discriminatory reason for termination in most circumstances. The relevant inquiry at the summary judgment level is not whether a reasonable jury would conclude that an employee’s conduct was insubordinate, but whether the employer genuinely believed it to be so at the time of the complained-of adverse action.”

Baldwin continued, “A jury may disagree with a company’s decision to terminate an employee for insubordination or may think that the decision was in error, but so long as the employer `genuinely believed the truth of their stated reason for the decision,’ the reason is not pretextual, and the employee will be unable to prove discrimination. The most effective way to support an employer’s genuine belief is complete, contemporaneous, and objective documentation of the employee actions and statements on which the decision is based.”


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