While employee performance reviews are designed to benefit and improve the operations of an employer; if not properly implemented, a performance review program may prolong an employment discrimination claim. 

Generally speaking, many employers use some form of employee performance reviews. These reviews, also called performance appraisals, commonly include some type of a regular evaluation, e.g., annual, quarterly, etc., employee performance improvement plans, progressive discipline policies, and coaching sessions.

The remainder of this post discusses how these employee review programs may help or hurt the defense of an employment discrimination claim. 

How Performance Reviews Hurt a Company

Performance assessments generally prove to be detrimental to the defense of an employment related claim in two scenarios:

1. If the employer’s evaluation process is based on unfettered discretion or is otherwise excessively subjective. 
2. A discharge may be successfully challenged if performance evaluations are nonexistent or the employee receives good ratings but is nevertheless terminated for poor job performance.

Two Examples of Performance Reviews Benefiting and Hurting an Employer

In Chen v. Dow Chem. Co., 580 F.3d 394 (6th Cir. 2009), an Asian-American filed suit in federal court against Dow, alleging discrimination and retaliation in violation of Title VII. Chen appealed after the district court granted summary judgment for Dow on both claims, finding that Chen failed to rebut Dow’s legitimate, non-discriminatory reason for terminating her—her chronic poor performance. 

On appeal, the Sixth Circuit sided in favor of the employer citing Dow’s reliance on performance reviews that showed Chen’s repeated performance problems when it made its decision to terminate her. Specifically, these reviews showed Chen had an eighteen-month history of performance problems, including two failed performance audits, a negative review for 2005, and a history of customer complaints and conflicts with co-workers.

In contrast, in Moss v. City of Abbeville, (D.S.C. July 15, 2010) (PDF), the plaintiff was terminated for poor job performance approximately three months after returning to work from Family Medical Leave Act (“FMLA”)leave.

The plaintiff filed suit, alleging that he was subjected to retaliation in violation of the FMLA. The employer unsuccessfully moved for summary judgment. The Court rejected the employer’s position that poor job performance was its legitimate, non retaliatory reason for the plaintiff ’s termination. In reaching this decision, the Court highlighted the following evidence:

1. A general lack of documentation to corroborate any alleged poor performance, as the Plaintiff’s documented work history was favorable; 
2. The Director of the Utilities Department and the City Manager had approved the Plaintiff ’s performance ratings as “meeting” or performing “above standards” for several years prior to terminating him based on alleged poor job performance; 
3. The Plaintiff ’s performance evaluation for 2005 rated the Plaintiff ’s performance “above standards;”
4. The Plaintiff ’s last annual performance evaluation before he took FMLA leave, which was for 2006, indicated that the Plaintiff ’s performance received “standards” and “above standards” in all criteria; and
5. An affidavit submitted by one of the Plaintiff ’s crew members who worked closely with the Plaintiff for many years indicated that the Plaintiff ’s performance was good and he had no more late work orders than anybody else on the crew; and (6) the fact that the Plaintiff

Conclusion

When implementing any type of performance review program, the employer and its human resource professionals must carefully consider its execution. Otherwise, an improperly implemented performance evaluation can be evidence that a claim of poor performance is pretext for discrimination.