for Non-Performance Upheld
In a recent decision, the Sixth Circuit Court of Appeals upheld the
termination of the executive director of a non-profit corporation when she
failed, over several years, to balance the budget. In doing so her assertions that she was
terminated on the basis of her sex and that she was held to a stricter standard
than was her male successor were rejected.
Gunn v. Senior Services of Northern Kentucky, No. 15-5320 (6th
Cir. Dec. 7, 2015).
Gunn was in 2000 hired as the Executive Director of Senior Services
of Northern Kentucky (“SSNK”); eventually she as well accumulated the titles of
President and CEO. By 2006 the
corporation was operating at a deficit; losses were being covered by a related
endowment. In 2006 the operating deficit
was $101,000 and in 2008 it was $81,653. The Board, in June, 2008, directed
that management’s goal was “to react to the [funding] cuts and achieve a
balanced budget in 2009.” Slip op. at
2. Instead, in 2009 the deficit was
$93,000, and the estimate for the 2010 budget was estimated to be as high as
$150,000. The Board reiterated its
direction that a balanced budget needed to be achieved. In July, 2010 a new
Board Chair told Gunn that her number-one priority is a balanced operating
budget. Still, on May 25, 2011 an
operating budget deficit of $183,223, along with a projected deficit for the
year of $281,417, were reported to the Board.
Gunn submitted a 2012 budget showing a $164,000 deficit, an action “That
signaled the end of Gunn’s tenure at SSNK.”
Slip op. at 4. Gunn responded by bringing suit under the Civil Rights
Act of 1964 and Kentucky’s similar law, asserting, inter alia that she was terminated on the basis of her sex. SSNK moved for summary judgment, which was
granted by the trial court. That
determination would be upheld by the Court of Appeals.
Claims of discrimination on the basis of sex move through a three
stage analysis: first, does the plaintiff make out a prima facia case of
discrimination; second, does the defendant offer a legitimate,
non-discriminatory basis for the action taken; and third, can the plaintiff
demonstrated that the proffered legitimate basis is a pretext? Slip op. at 6, citing McDonnell Douglas
Corp. v. Green, 411 U.S. 792 (1973).
In this case SSNK pointed to the repeated failures to achieve a
balanced operating budget as a nondiscriminatory basis for Gunn’s
termination. In response thereto the
burden shifted to Gunn to establish pretext, which requires that the plaintiff
(1) the employer’s stated reasons for
terminating the employee have no basis in fact, (2) the reasons offered for
terminating the employee were not the actual reason for the termination, or (3)
the reasons offered were insufficient to explain the employer’s action. Imwalle v.
Reliance Med. Products, Inc., 515 F.3d 531, 545 (6th Cir. 2008). “[A]
reason cannot be a pretext for discrimination unless it is shown both that the
reason was false, and that discrimination was the real reason.” Seeger, 681 F.3d at 285 (alteration
omitted) (quoting St. Mary’s Honor Ctr. v. Hicks, 509
U.S. 502, 515 (1993)). Thus, regardless of which rebuttal method a plaintiff
uses, “he always bears the burden of producing sufficient evidence from which
the jury could reasonably reject the defendant’s explanation and infer that the defendant intentionally
discriminated against him.” Id. at 285 (alterations omitted).
Gunn attempted to proceed under the second option, namely that “the
reasons offered for terminating the employee were not the actual reason for the
termination.” This she was not able to
do. While she profered favorable
evaluations, they largely pre-dated the declining economic health of SSNK. Positive comments on balanced projections did
not alter the fact that those projections did not come to pass and the deficits
were the reality. Assertions that she
was not afforded enough time to fix the problem were likewise rejected; in fact
she had been told for several years that achieving a balanced budget was her obligation.
A back-up argument that SSNK failed to follow its own internal
discipline procedures failed when it was noted that they did not apply to the
As for the claim that her male successor was not treated the same
way, while he continued to operate SSNK at a deficit, he reduced the $200,000
deficit of Gunn’s last year to a deficit of $65,000 in his first year and
projected only a $14,000 deficit in the next year.
In closing, the Sixth Circuit observed:
and again we have emphasized that [o]ur role is to prevent unlawful
[employment] practices, not to act as a super personnel department that second
guesses employers’ business judgments.” Corell v. CSX Transp., Inc.,
378 F. App’x 496, 505 (6th Cir. 2010)
(first alteration in original). The evidence cited by plaintiff shows an
organization struggling to make ends meet, a Board of Directors looking to
their chief executive for answers, and an executive who was ultimately unable
to produce tangible results. It does not, however, demonstrate pretext.