New England Biz Law Update
A business development director who lost her job three months after disclosing her pregnancy could not pursue a Title VII discrimination claim against her employer, which asserted the position had become obsolete due to changing market conditions, a U.S. District Court judge in Massachusetts has ruled.
The plaintiff employee — whose job was to seek seeking strategic alliances with New England hospitals — argued that she was not required to satisfy the Title VII element that the employer used other people to replace her.
But Judge F. Dennis Saylor IV, in granting the defendant employer summary judgment, concluded that the elimination of the plaintiff’s job did not excuse her from establishing that element of her pregnancy discrimination claim.
“It is true that ‘a plaintiff need not demonstrate that a new employee was hired or a current employee was formally designated as a replacement in order to satisfy the fourth prong of the prima facie case,’” Saylor wrote. “However, the plaintiff must still show that the employer ‘had a continuing need for the work that [the plaintiff] was performing prior to her termination.’”
The 21-page decision is LaPorte v. Laboratory Corporation of America Holdings.
‘Open season’?
Boston attorney Elayne N. Alanis represented plaintiff Misty LaPorte, who was terminated by Laboratory Corp. of America Holdings in December 2012, six months after she was hired and three months after she disclosed her pregnancy.
Alanis contended that defendant LabCorp’s business justification for eliminating LaPorte’s position — that rapidly changing conditions in the New England health care market made the job obsolete — was a pretext.
“What I think happened is that they decided to terminate Miss LaPorte [because of her pregnancy] and essentially backed into the reasons,” Alanis said. “The reasons that this defendant put forth are a series of smoke and mirrors.”
Alanis said her client was relieved of the burden of showing she was replaced because LabCorp completely eliminated her position.
“The way I read the case law, because it is nonsensical to show that they replaced the employee, the fourth prong [of a prima facie case of Title VII discrimination] becomes whether there is enough reasonable evidence in the record that could point to the possibility of unlawful discrimination,” Alanis said.
LabCorp was represented by Robert I. Steiner of Kelley, Drye & Warren in New York City. Steiner declined to comment on the decision at his client’s request.
However, Boston defense attorney Michael J. Mazurczak said the ruling in LaPorte is consistent with how federal judges in Massachusetts have interpreted the replacement requirement in past cases, in particular showing deference to the employer’s business judgments.
“To me, the decision demonstrates the effectiveness of a motion for summary judgment in those cases when you can’t meet the fourth prong of the McDonnell Douglas [burden-shifting] test,” said Mazurczak, who heads the employment practice group at Melick & Porter.
But Alanis argued that it is for a jury to decide whether LabCorp had a legitimate business reason for its actions.
“What concerns me is that if you cannot challenge whether a unilateral business decision made by the employer is reasonable and rational given the circumstances, then you are declaring open season on discrimination,” Alanis said.
Brian J. MacDonough, a plaintiffs’ employment attorney, also disagreed with the notion that Title VII’s replacement prong is a bright-line standard.
“The fourth element is flexible, depending on the circumstances of the case,” said MacDonough, of Shilepsky, Hartley, Robb, Casey, Michon in Boston. “Certainly in reduction in force cases, the fact that a job was eliminated, generally that’s not the end of the analysis.”
MacDonough said he was most surprised by Saylor’s conclusion that LaPorte could not establish a prima facie case of pregnancy discrimination for her parallel claim under Massachusetts law.
“The Supreme Judicial Court has made clear that the initial burden of establishing a prima facie case is not meant to be onerous,” MacDonough said.
Eliminated position
Based in North Carolina, LabCorp sells medical laboratory tests and services to hospitals and other health care providers. In early 2012, LabCorp adopted a marketing plan that sought the formation of “strategic alliances” with hospitals in New England under which it would either provide laboratory services or assume laboratory operations.
On June 18, 2012, LabCorp hired LaPorte to fill the newly created position of director of strategic alliances for the New England area. Her job was to identify potential hospital partners for strategic alliances and conduct presentations with hospital officials in an effort to sell the concept.
During the six months she worked at LabCorp, LaPorte was completely stymied in her effort to create strategic alliances and meet her sales quota of $6 million a year.
LaPorte’s immediate supervisor was Marie Daniel, LabCorp’s vice president of alliances, mergers and acquisitions. Daniel grew critical of LaPorte’s job performance, citing mistakes in LaPorte’s correspondence with hospital executives and presentation materials.
Daniel requested that LaPorte attend a new-hire training session in September 2012, but LaPorte missed most of the program when she experienced uncontrollable vomiting. At a Sept. 24 meeting to discuss her job performance, LaPorte revealed to Daniel that she was pregnant. According to LaPorte, Daniel adopted a hostile attitude against her from that point forward.
Daniel claimed that she first considered terminating LaPorte in October or November 2012. In addition to having continuing concerns about LaPorte’s performance, Daniel and another LabCorp executive began having discussions concerning the overall viability of the company’s strategic alliance plans for New England.
LabCorp would later contend in court that “rapid” changes in the New England health care market — in particular a trend of hospitals consolidating and joining networks — had made its strategic alliance model unworkable.
Before formally implementing a performance improvement plan to address concerns over the quality of LaPorte’s work, the company decided to eliminate LaPorte’s position and terminate her employment. On Dec. 13, 2012, Daniel met with LaPorte and told her that her position was being eliminated because of the lack of viable strategic alliance opportunities in New England.
According to LaPorte, there were ample opportunities in the New England market, and she was fired because of her pregnancy. She sued LabCorp for pregnancy discrimination under both Title VII and G.L.c. 151B.
No prima facie case
In addressing LabCorp’s motion for summary judgment, Saylor first noted that LaPorte’s Title VII claim fell within the McDonnell Douglas burden-shifting framework because there was no direct evidence of discriminatory intent.
To establish a prima faciecase of discrimination under Title VII, Saylor said, LaPorte was required to show that: (1) she was a member of a protected class; (2) she possessed the necessary qualifications and adequately performed her job; (3) she suffered an adverse employment action; and (4) LabCorp sought someone of roughly equivalent qualifications to perform substantially the same work.
LabCorp argued that LaPorte could not establish the fourth element given that the company had not hired anyone to replace her as strategic alliance director of the New England area.
Saylor rejected LaPorte’s argument that the complete elimination of her position relieved her of the obligation to satisfy the fourth prong of the test. The judge wrote that, at the very least, LaPorte had to show that LabCorp had a “continuing need” for the work that she was performing before she lost her job.
“For example, a plaintiff could produce evidence that a defendant’s other employees assumed the plaintiff’s tasks after her employment was terminated,” Saylor said.
The judge found that the evidence in the record failed to show that LabCorp employees performed work within the scope of LaPorte’s responsibilities after her termination.
“There is therefore no genuine dispute that [LabCorp] did not have a continuing need for plaintiff’s work after her termination,” Saylor wrote.
Moreover, the judge concluded that, even if LaPorte could prove a prima faciecase of discrimination, she failed to show that LabCorp’s stated reasons for terminating her employment were a pretext.
“Plaintiff’s criticisms of [LabCorp’s] business judgment are, admittedly, based on her own opinion and speculation,” Saylor wrote. “Such speculation cannot create a genuine issue of material fact sufficient to defeat summary judgment.”
Turning to LaPorte’s Chapter 151B pregnancy discrimination claim, the judge acknowledged that she could satisfy the fourth element of her prima facie case merely by “producing some evidence that her layoff occurred in circumstances that would raise a reasonable inference of unlawful discrimination.”
However, the judge concluded that LaPorte could not satisfy the less onerous state standard.
“Plaintiff has failed to produce evidence that her layoff occurred in circumstances that would raise a reasonable inference of unlawful discrimination,” Saylor said. “Even though she contends that defendant was filling open positions for strategic-alliance directors for other regions, she fails to establish that those positions faced the same marketplace changes as the New England area.”
