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Fifth Circuit: Indian Respiratory Therapists Failed to Establish Pretext

In Assariathu v. Lone Star Health Management Associates, L.P., No. 12-10730 (5th Cir. March 6, 2013) (unpublished), eight respiratory therapists of Indian ancestry sued the Dallas Regional Medical Center for race and national origin discrimination.  As part of a department restructuring, all respiratory therapists were required to re-interview for their jobs.  The head of the department and the HR director devised a set of 10 interview questions.  The questions related to overall attitude, abilities, knowledge, and skills, with an "extra credit" question that was "What do you bring as an employee to DRMC?"  After the interview, the department head and the HR director would grade the interviewee based on the department head's notes, his recollection of the interviews, and some other items such as performance appraisals.

16 of the 32 respiratory therapists were fired based on the interview scores.  Over half were racial minorities: seven were Asian and two were black.  Over the next six months, DRMC hired ten new respiratory therapists, seven of whole were white.

The plaintiffs sued for wrongful termination based on race and national origin discrimination.  The district court granted summary judgment, and the Fifth Circuit affirmed.

DRMC did not dispute that the plaintiffs presented a prima facie case of discrimination.  Instead, DRMC argued that it had a legitimate, non-discriminatory basis for the decision: the low interview scores.  The plaintiffs challenged this justification because the the justification was not "clear and reasonably specific" as required by precedent.  The Fifth Circuit rejected that argument because DRMC was offering more than an "unexplained interview score," but instead had explained the basis for the scores through deposition testimony and documents.

The plaintiffs offered a number of arguments for why the scores were pretextual: (1) the department head yelled at Indian respiratory therapists, but was never rude to white employees; (2) performance appraisals (as opposed to the interviews) were not performed for the terminated employees; (3) the department restructuring never really happened; (4) DRMC gave inconsistent reasons for the plaintiffs' terminations; and (5) DRMC committed violations of its own policies and procedures, including losing the department head's interview notes.  The Fifth Circuit brushed these arguments aside, saying that "most of plaintiffs' arguments constitute nothing more than a criticism of DRMC and HMA's subjective business decision to terminate them."  The Fifth Circuit refused to engage in "judicial second guessing."

In a footnote, the Fifth Circuit also brushed aside the striking statistical evidence that over half of the fired employees were minorities, while 7 of 10 replacements were white.  The court stated (correctly) that the hiring patterns are evidence of discrimination, by themselves, only if the employer fails to articulate a reason for the hiring patterns.  The court stated that "Plaintiffs' allegation that their lower test scores on a test with facially neutral questions constitute a cloak for invidious discrimination thus goes to falsity, not disparate treatment."

However, the court then failed to discuss the statistical evidence in connection with falsity (i.e., pretext).  The net effect is that subjective scores based on interviews by a department chair accused of having racial bias were allowed to have a virtually conclusive effect, even though the outcome was the replacement of a large number of minorities with white employees.

This case demonstrates the importance to an employer of having a carefully prepared system for selecting the employees to be terminated, coupled with the ability to articulate a basis for the scores.  Even a striking disparity in the results may not persuade a court that the system is a subterfuge for discrimination.

David C. Holmes is a Houston employment lawyer with The Law Offices of David C. Holmes