Although the Supreme Court's affirmative action cases¹ got a lot of attention when they were issued, the case that will have a greater impact on employers will be Desert Palace, Inc. v. Costa². This is because direct evidence of discrimination is no longer needed in order to get a mixed-motive jury instruction, which in turn makes it easier for claimants to obtain recovery and avoid pre-trial dispositive motions. Another way of looking at this new case is this: you can go to trial, convince a jury that you would have taken the same adverse action against the claimant, avoid having to pay monetary damages, but still have to pay the Plaintiff's (sizeable) attorney's fees and court costs. How can that be right?

BACKGROUND

Ann Hopkins was an accountant employed by the Price Waterhouse accounting firm. She sued the firm when she was passed over for a partnership. This became known as a "mixed motive" case, because evidence was presented that Price Waterhouse was motivated, in part, by unlawful animus³. In a mixed motive case, the Plaintiff has the burden to prove the employer was at least partially motivated by a discriminatory reason. An affirmative defense is available: the employer can escape liability if it can prove that it would have taken the same adverse action, even without an unlawful motive. In the providing the deciding vote in a split decision, Justice O'Connor wrote that a "mixed motive" jury question was only available to a Plaintiff when there was direct evidence of discriminatory animus⁴.

A couple of years later, Congress amended Title VII in several respects. For example, jury trials and capped compensatory and punitive damages became available⁵. In what would become §703(m) of the law, Congress stated an unlawful employment practice is established when the Plaintiff "demonstrates that race, color, religion, sex or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice."

Congress further provided in §706(g)(2)(B) that if an individual proves a violation of §703(m) and the employer "demonstrates that [it] would have taken the same action in the absence of the impermissible motivating factor," the individual would still be entitled to recover declaratory and injunctive relief, attorney's fees, and costs.

Subsequent to the passage of these amendments, known as the Civil Rights Act of 1991, most courts continued to hold that unless there was direct evidence of discriminatory motive, these amendments did not apply (and thus the Plaintiffs would not be entitled to a dual motive instruction⁶. Nevertheless, the Ninth Circuit held in an en banc decision that the Civil Rights Act of 1991 made no distinction between direct and indirect evidence being needed to establish the existence of a dual-motive. Costa v. Desert Palace, Inc., 299 F.3d 838 (9th Cir. 2002) (en banc). Due to the split rulings between the courts of appeal, the U.S. Supreme Court decided to review the case.

THE SUPREME COURT DECISION

Writing for a unanimous Supreme Court, Justice Thomas⁷ agreed with the Ninth Circuit viewpoint. First, the text of the statute was "unambiguous" and only required that a Plaintiff "demonstrate" a forbidden consideration was taken into account with respect to "any employment practice." In other words, nothing in the statute said anything about direct or indirect evidence. The Court buttressed its analysis by pointing out the statutory definition of "demonstrates" means meeting "the burdens of production and persuasion."

Justice O'Connor wrote a concurring opinion, which basically reiterated her opinion in Price Waterhouse distinguishing between direct and indirect evidence, but noted that the distinction was no longer appropriate in light of Congress' codifying a new evidentiary standard in the Civil Rights Act of 1991.

SIGNIFICANCE: MORE QUESTIONS THAN ANSWERS

Although the Supreme Court agreed that a dual motive jury instruction does not require direct evidence of discriminatory animus, it did not provide any guidance as to what sort of evidence must be presented by a Plaintiff to justify a mixed-motive jury instruction. Is a bare minimum of evidence of a prima facie case enough? If so, it would seem that the pretext line of cases such as Burdine⁸ have been effectively nullified. Is this what Congress intended? Is this what the Supreme Court intended? We do not know, because the Court did not address this concern in its opinion; it merely said the trial court did not abuse its discretion in providing the jury with a mixed-motive instruction.

The Ninth Circuit's Costa decision⁹ appears to have viewed the quality of the evidence as sufficient for a reasonable jury to believe that an impermissible factor played a motivating role (and this justified the dual-motive instruction). If other courts follow this lead, sufficiency of the evidence rulings will be on a case-by-case basis, and it may not be until the close of the evidence that a decision can be made on whether a mixed motive instruction is appropriate. This, in turn, could lead to a significant decline in the number of summary judgment motions granted in employment cases¹⁰.

The other issue unresolved by Desert Palace is the scope of relief available to a Defendant who successfully proves that the same action would have been taken against the Plaintiff, even absent discrimination. Although §706(g)(2)(B) limits the relief available to such a Plaintiff, it does authorize an award of attorney's fees. Courts addressing this issue prior to Desert Palace were split on the issue of whether attorney fees were recoverable when there was no monetary award¹¹. The Supreme Court did not resolve this difference of opinion. It undoubtedly will require another case for another day to resolve this issue.

THE IMMEDIATE AFTERMATH

As of the writing of this article, there have been a mere handful of cases interpreting Desert Palace. In an FMLA case, Gibson v. City of Louisville, 2003 U.S. App. LEXIS 14329 (6th Cir. 7/17/03), the Sixth Circuit Court of Appeals only made passing reference to the case, indicating that it applied to dual motive cases and did not change the requirement that the Plaintiff prove, by a preponderance of the evidence, whether unlawful discrimination was the "real reason for the adverse employment action."

The employer successfully obtained partial summary judgment in Davis v. Emery Worldwide Corp., 2003 U.S. Dist. LEXIS 10697 (D. Me. 6/23/03)¹², with the court holding that Desert Palace did not apply when the summary judgment evidence before the court raised "no possibility of a mixed motive for the Defendant's actions."

However, if courts follow the lead of the United States District Court for the District of Minnesota, employers and their counsel will be significantly challenged by Desert Palace. In both Gonzalez v. City of Minneapolis, 2003 U.S. Dist. LEXIS 10141 (D. Minn. 6/13/03) and Skonisky v. Speedway SuperAmerica, L.L.C., 2003 U.S. Dist. LEXIS 10112 (D. Minn. 6/13/03), the court held that dual motive analysis applies whenever a Plaintiff pleads that multiple unlawful reasons motivated the employer's adverse decision. In Dare v. Wal-Mart Stores, Inc., 2003 U.S. Dist. LEXIS (D. Minn. 6/13/03), the court held the Desert Palace dual motive analysis also applies to single motive cases brought under federal law, but that Burdine analysis applies to state law claims.

By contrast, in Winter v. Bank of America, N.A., 2003 WL 23200278 (N.D. Tex. 12/12/03), a federal district court in Texas refused to apply the evidentiary framework of Desert Palace in a case involving dual claims of discrimination and retaliation. Noting the distinction between a pretext case (where the employer has either a discriminatory or a non-discriminatory rationale for its actions) and dual motive cases (where the employment decision is motivated by both legitimate and illegitimate/discriminatory reasons), the court expressly held that Desert Palace did not abrogate the burden-shifting paradigm of Burdine and McDonnell Douglas. Moreover, according to this court, Desert Palace should not be applied in employment cases alleging that adverse action was based solely on illegitimate/discriminatory reasons (pretext cases), even if multiple illegitimate/discriminatory reasons are alleged. Notably, in reaching this result, the court in Winters cited an unpublished Fifth Circuit opinion on the ground that it cited Desert Palace, but nevertheless applied the burden-shifting framework to the plaintiff's gender and age discrimination claims. See Read v. BT Alex Brown Inc., 72 Fed. Appx. 112 (5th Cir. 2003).

In Sartor v. Spherion Corp., 2003 WL 22765049 (N.D. Ill. 11/21/03), a federal district court in Illinois held that Desert Palace was inapplicable where the employee alleged that his termination constituted discrimination on the basis of both race and gender. In light of the employer's defense, that the termination was based strictly on legitimate, non-discriminatory reasons, the court concluded that the traditional burden-shifting analysis for pretext cases was applicable. More importantly, the court ruled that Desert Palace was inapplicable on the ground that in this case, unlike in Desert Palace, the employee alleged "specific acts of discrimination." Specifically, the employee complained that, among other things, he was not assigned to work at the office location of his choice; he received undesirable assignments; he was given "accent management" classes; he was not provided with an office for five weeks; and he was not promoted to a position that he thought he deserved.

Reiterating the distinction between pretextual and dual motive cases, the Ninth Circuit in Stegall v. Citadel Broadcasting Co., 350 F.3d 1061 (9th Cir. 2003), suggested that whereas the traditional burden-shifting analysis of Burdine and McDonnell Douglas is applicable in "single motive" (i.e., pretext cases), it is not applicable in dual motive cases. With regard to the latter class of cases, the court reasoned that "it does not make sense to ask if the employer's stated reason for terminating an employee is a pretext for retaliation when the employer has offered more than one reason for the action that it took." The relevant inquiry in dual motive cases is not whether an employer's proffered reason is pretextual, but rather, in light of all of the evidence presented, whether a discriminatory reason was a "motivating factor" for the employer's challenged action.

CONCLUSION

By eliminating the direct/indirect evidence dichotomy, the Supreme Court undoubtedly wanted to simplify cases. Unfortunately, more questions were created than were answered. What is clear is that you may deny Plaintiff any monetary recovery in his/her next case against you, but still be on the hook for paying attorney's fees and costs. Also, a court may not be willing to grant summary judgment, particularly if there is some evidence (adequate evidence?) of an unlawful motive. Until the Supreme Court (or Congress) resolves some of these issues, look for settlement values in employment cases to increase.

¹ Gratz v. Bollinger, _____ U.S. _____, 2003 U.S. LEXIS 4801 (June 23, 2003); Grutter v. Bollinger, ______ U.S. _____, 2003 U.S. LEXIS 4800 (June 23, 2003).
² ____ U.S. ____, 123 S. Ct. 2148 (2003).
³ Evidence cited by Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775 (1989) as supporting discriminatory animus included Hopkins being described as "macho," "overcompensated for being a woman," and needing to take "a course at charm school." 109 S. Ct. at 1782. The partner who explained to Hopkins why her partnership application had been placed on hold advised her to "walk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry." Id. ⁴ In the absence of direct evidence, the traditional Burdine analysis would be used; i.e., plaintiff must establish prima facie case, Defendant "articulates" a non-discriminatory reason for its action, with plaintiff then required to disprove the employer was motivated by its "articulated" reason. The significant distinction between these two analyses is that the burden of proof never shifts to the Defendant under the Burdine, whereas the Defendant has the burden of proof on the affirmative defense in a dual-motive case.
⁵ See 42 U.S.C. §1981a.
⁶ See, e.g., Weston-Smith v. Cooley Dickinson Hosp., Inc., 282 F.3d 60 (1st Cir. 2002); Ostrowski v. Atlantic Mut. Ins. Co., 968 F.2d 171 (2d Cir. 1992); Starcrest v. Westinghouse Elec. Corp., 54 F.3d 1089 (3d Cir. 1995); Fuller v. Phipps, 67 F.3d 1137 (4th Cir. 1995); Brown v. East Miss. Elec. Power Ass'n, 989 F.2d 858 (5th Cir. 1993); Laderach v. U-Haul of Northwestern Ohio, 207 F.3d 825 (6th Cir. 2000); Plair v. E.J. Brach & Sons, Inc., 105 F.3d 343 (7th cir. 1997); Mohr v. Dustrol, Inc., 306 F.3d 636 (8th Cir. 2002); Heim v. Utah, 8 F.3d 1541 (10th Cir. 1993), Carter v. Three Springs Residential Treatment, 132 F.3d 635 (11th Cir. 1998).
⁷ Before his judicial career, Justice Thomas held a number of government positions, including chairmanships of the EEOC.
⁸ Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 101 S. Ct. 1089 (1981).
⁹ 299 F.3d 838 (9th Cir. 2002) (en banc)
¹⁰ See Section entitled "The Immediate Aftermath," infra.
¹¹ Compare, Sheppard v. Riverview Nursing Ctr., Inc., 88 F.3d 1332 (4th Cir. 1996) (attorney's fee award under § 706(g)(2)(B) was discretionary -- not mandatory -- and thus a full attorney's fee not warranted where no monetary relief obtained) with, Gudenkauf v. Stauffer Communications, Inc., 158 F.3d 1074 (10th Cir. 1998) (language and legislative history of Civil Rights Act of 1991 demonstrates Congress' conclusion that claimant who proves mixed motive should receive attorney's fees, even if damages award is minimal or non-existent).
¹² Note, this case is a recommended decision by a United States Magistrate Judge.