October 20, 2016 Practice Points

7th Circuit Exterminates “Rat’s Nest” of Employment-Discrimination Tests

At least in the Seventh Circuit, no reference to varying tests or “mosaics” will be made.

By Rebeca M. López – October 20, 2016

The ultimate question in a disparate-treatment employment-discrimination case is whether the plaintiff was the victim of intentional discrimination. In many cases, this question is first presented to the court through a motion for summary judgment. Over the years, federal courts have analyzed the evidence presented in such motions through “direct” and “indirect” methods, further complicating the analysis by asserting that a plaintiff may only overcome a defendant’s motion by presenting a “convincing mosaic” of discrimination.

In Ortiz v. Warner Enterprises, Inc., the Seventh Circuit Court of Appeals colorfully rejected these tests, referring to the “rat’s nest of surplus ‘tests,’” and simplifying the analysis that courts within its jurisdiction (Wisconsin, Illinois, and Indiana) must apply moving forward. No. 15-2574 (7th Cir. Aug. 19, 2016).

In a “disparate treatment” discrimination claim, an employee alleges that his or her employer has treated the employee less favorably based on a protected characteristic. To survive summary judgment, the employee must demonstrate that the protected characteristic actually motivated the alleged adverse action through a burden-shifting framework.

The allocation of the burden of proof in employment-discrimination cases was first established by the U.S. Supreme Court in McDonnell Douglas Corp. v. Green. 411 U.S. 792 (1973).A plaintiff must first prove the following elements: (1) membership in a protected class; (2) qualification for the position; (3) an adverse employment action; and (4) a causal connection between the adverse action and the protected characteristic. Courts have emphasized different elements and tailored the elements to the factual circumstances presented.

If the plaintiff succeeds in establishing a prima facie case, then the burden shifts to the defendant to articulate a legitimate, nondiscriminatory reason for the adverse action. Once articulated, the burden shifts back to the plaintiff to present evidence that the defendant’s stated reason is pretext for discrimination.

Over the years, federal courts have affirmed, refined, and developed the McDonnell Douglas test, and categorized the evidence presented by an employee as “direct” or “indirect/circumstantial” evidence of the employer’s discriminatory intent. Under the direct method, a plaintiff establishes his or her case by presenting a defendant’s admissions of culpability or “smoking-gun” evidence. Conversely, under the indirect method, the plaintiff relies upon suspicious circumstances and temporal proximity. Some courts require that plaintiffs present a “convincing mosaic of evidence” to overcome summary judgment.

In Ortiz, the plaintiff alleged that he was terminated based on his ethnicity. In dismissing the plaintiff’s case on summary judgment, the district court applied both the direct and indirect methods, treating each as having its own elements. The district court determined that the plaintiff failed to present a convincing mosaic of the employer’s discriminatory intent to survive summary judgment.

In reversing the district court’s ruling, the Seventh Circuit explained that the use of “disparate methods and the search for elusive mosaics has complicated and side-tracked employment discrimination litigation for many years.” Exacerbated by lower courts’ insistence on applying the different tests, the court of appeals ruled that the tests are no longer to be applied. Evidence may no longer be compartmentalized through the direct and indirect methods. Judge Easterbrook explained, “[e]vidence is evidence. Relevant evidence must be considered and irrelevant evidence disregarded, but no evidence should be treated differently from other evidence because it can be labeled ‘direct’ or ‘indirect.’”

Following Ortiz, all evidence must be considered together to answer the ultimate question:

Whether a reasonable juror can conclude that the Plaintiff would not have suffered the adverse action if he or she was a different gender/ethnicity/color, etc., and everything else had remained the same?

Based on the court’s analysis and the evidence presented by the plaintiff, the court of appeals overturned the district court’s decision and remanded the Ortiz case for trial.

Courts in the Seventh Circuit may no longer categorize evidence as direct or indirect. Nor should district courts reference a “mosaic” of any kind.

By simplifying the test, both plaintiffs and defendants may benefit. Plaintiffs no longer need to emphasize the mosaic of circumstantial evidence to survive summary judgment. At the same time, a simplified analysis may make it easier for defendants to argue that no factual issues exist that would defeat summary judgment.

Importantly, Ortiz did not overrule McDonnell Douglas, and the burden-shifting framework remains.Thus, while the framework will continue to be relied upon in employment-discrimination cases for the foreseeable future, at least in the Seventh Circuit, no reference to varying tests or “mosaics” will be made.

Rebeca M. López is an associate with Godfrey & Kahn in Milwaukee, Wisconsin.

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