Dive Brief:
- An employee who was fired due to her employer's sincere but mistaken belief that she had been stealing from a company client was unable to prove her discrimination and retaliation claims (Smith v. Towne Properties Asset Management Company, Inc., No. 19-3681 (6th Cir. March 4, 2020)).
- Robyn Smith, an apartment community manager, charged her gas and utility bills to one of her employer's client companies due to a mistaken belief that she was entitled to free utilities. She was fired for engaging in theft or dishonest acts, and the employer did not reverse the termination decision after getting all of the facts. Smith had previously taken medical leave and claimed her firing was due to disability bias and retaliation in violation of the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA).
- The 6th U.S. Circuit Court of Appeals upheld a summary judgment ruling in favor of the employer. The employer had undertaken a thorough investigation before terminating Smith, and "When Towne decided to fire Smith — the only relevant time for measuring pretext — it had ample factual basis for concluding that Smith was effectively stealing from Towne’s client."
Dive Insight:
As the court in this case pointed out, "Mistakes happen. Including in the context of employment decisions." Good-faith mistakes can help an employer defend itself against allegations of bias or retaliation, but it's obviously preferable to avoid those mistakes in the first place.
HR is well-equipped to conduct its own internal investigations most of the time, according to experts. The legal standard is "good faith and a well-reasoned conclusion," according to Fisher Phillips attorney Pavneet Singh Uppal, who spoke at the 2018 SHRM annual conference. Even if your ultimate determination turns out to be wrong, he said, you will not be legally liable if you acted in good faith.
A good-faith investigation involves examining all of the relevant facts with an open mind. Good faith also requires an employer to investigate all allegations of wrongdoing, even those that may seem frivolous or insignificant. Ignoring complaints, or evidence of problematic behavior, can be a recipe for legal disaster.
United Airlines, for example, recently paid over $300,000 to settle claims that it had turned a blind eye for years to a pilot who allegedly posted sexually explicit images of a flight attendant to websites without her consent. The flight attendant had repeatedly complained and provided evidence of the misconduct, to no effect, according to the U.S. Equal Employment Opportunity Commission (EEOC).