Employee Investigation ReportA recent court decision shows that the “honest belief” rule continues to be a potent defense for employers responding to employment discrimination claims. And conversely, it continues to be a frustrating hurdle for employees to overcome in proving unlawful discrimination in the workplace.

Specifically, the honest belief of a Wal-Mart manager was found to protect the company from an age discrimination lawsuit brought under Michigan’s Elliott-Larsen Civil Rights Act (ELCRA). The full court opinion is available here Richardson v Wal-Mart (9/9/16).

The Honest Defense Belief

Under this rule, employers may avoid a finding that the claimed nondiscriminatory reason was pretextual if the employer can establish its reasonable reliance on the particularized facts that were before it at the time the decision was made.

Wal-Mart’s policy calls for an employee to be terminated after four disciplinary actions. Wal-Mart’s Store manager, Mark Darby, followed the company policy when he fired Richardson after she violated a workplace safety rule that resulted in a fourth disciplinary action.

Richardson, however, claimed that she learned from a colleague several weeks before she was fired that Darby and other the assistant managers wanted her fired and “they were looking for any excuse they could find to get [her] out of the store.” In this regard, Richardson appeared to have argued that some of the disciplinary actions should have been disregarded because they were the product of unlawful discrimination by her managers.

But, Wal-Mart won in District Court after the judge granted its motion for summary judgment. In doing so, the judge found that Richardson lacked direct evidence that her termination was based on her age and she failed to establish that Wal-Mart’s stated nondiscriminatory reason for her discharge was pretextual.

The Court of Appeals agreed with the dismissal. Turning to the Wal-Marts’ “honest belief,” the court concluded that Richardson failed to present evidence calling into question Wal-Mart’s stated reason for terminating her, namely, her accumulation of four disciplinary actions.

Further, the Court concluded that even if such evidence was produced, Wal-Mart was still entitled to summary judgment under the honest belief rule.

Darby reasonably relied on the fact that Richardson had three prior [disciplinary] coachings in her record. Darby reviewed each of those coachings, and he terminated her employment based on her coaching history and her violation of Wal-Mart safety standards. Even if Darby might have concluded upon closer review that one or more of Richardson’s coachings should have been removed from her record, ‘[a]n employer’s pre-termination investigation need not be perfect in order to pass muster under the rule.’

Responding to and Establishing the Honest Belief Defense

The honest belief rule is especially difficult to overcome for plaintiff employees. To overcome an employer’s assertion of the honest belief rule, there must be evidence that demonstrates the employer did not ‘honestly believe’ in the proffered non-discriminatory reason for its adverse employment action.” But the honest belief rule continues to apply even if the employer’s conclusion is later shown to be mistaken, foolish, trivial, or baseless.

But this doesn’t mean that invoking the honest belief is a free pass for employers; courts routinely refuse to apply the defense where the employer fails to take reasonable action relative to the pre-termination/discipline investigation. In our experience, the hallmark of such reasonableness comes down to whether management disregards a readily available and potentially critical piece of information concerning the employee. In other words, if the decisional process was not reasonably informed then the honest belief rule should not apply.

For more information about this article or federal or Michigan employment law, contact attorney Jason Shinn. Mr. Shinn has focused on employment law and litigation since 2001. He routinely represents companies in complying with employment laws and employees discriminated under those laws.