No Discrimination or Retaliation Claim Exists When Employer Terminates An HR Manager For Failing to Disclose a Relationship With a Subordinate

Owens v. Old Wisconsin Sausage Company, Inc. - Seventh Circuit Court of Appeals

Facts:  Jamie Owens ("Owens") worked as the manager of Old Wisconsin Sausage Company, Inc.'s ("Old Wisconsin") HR department from June 2011 until April 2012.  At the time of her hiring, Owens was told by the HR manager she was replacing, Jeff Thiel ("Thiel"), that Old Wisconsin tended to be a "boys club".  Thiel indicated that Old Wisconsin hired Owens because she was female and that he Vice President of HR thought bringing in a female would help evolve the culture of the company.

While Owens worked as an HR manager, Matt Kobussen ("Kobussen") applied for an open position at the company as a retail store supervisor.  (Kobussen had applied for a position at Lakeside Foods when Owens was the HR manager there.)  Owens was involved in the first interview Kobussen had at Old Wisconsin but did not disclose the relationship they had nor the fact that they apparently lived together.  Although she was not a part of the second interview Kobussen had, she was part of a group of managers that decided to hire him.  In September and October of 2011, Owens was assigned supervisory responsibility for the retail store Kobussen worked at.  (At no time did Owens reveal to Old Wisconsin her relationship with Kobussen.)

In November of 2011, three different employees complained to a plant manager that Owens and Kobussen were in a relationship and a conflict of interest existed because Owens was now his supervisor.  Although Old Wisconsin had no policy that prohibited employees from dating, an informal policy existed to question supervisors in relationships with subordinates.  When Kobussen was questioned about a relationship with Owens, he deflected the question.  When Owens was questioned about a relationship with Kobussen, she "adamantly" denied it.  When questioned further, Owens said "I'm not answering this, this is borderline sexual harassment."  A subsequent performance review of Owens gave her a "C" and characterized her performance as mediocre.

On April 3, 2012, Old Wisconsin terminated Owens and produced a memo identifying numerous shortcomings and inconsistencies in the position which led to her termination.  (Kobussen was not terminated, however.)   Owens subsequently filed suit on the grounds that her termination was unlawful discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964 and was improper retaliation under the Fair Labor Standards Act for bringing alleged pay disputes to Old Wisconsin's attention.  The district court granted summary judgment in favor of Old Wisconsin on all claims brought by Owens.  Owens subsequently appealed.

Holding:  As the Seventh Circuit has routinely held, the standard of review for summary judgment in employment discrimination cases is whether the evidence would lead a reasonable fact finder to conclude that the employee's sex caused the termination.  As reflected in the record, Owens pointed to a range of actions by Old Wisconsin which she argued established discriminatory treatment toward her because she was female:  She was told to dress more professionally, bonuses were apparently given to men and not women, and it was suggested that she join Weight Watchers.  However, the Court distinguished that many of these alleged instances are unrelated to the adverse employment action she alleged.

Discrimination Claim

In this case, Owens' sex discrimination claim rested on her claim that her refusal to respond to "discriminatory questions" about a relationship with Kobussen is what led to her termination.  However, the Court held that Owens failed to establish a valid claim.  Namely, Owens could not present any evidence that a male supervisor who was in an undisclosed relationship with a subordinate and was not questioned by Old Wisconsin as to that relationship.  Quite simply, the Court found no evidence to establish that Owens was questioned about her relationship with Kobussen simply because she was a woman.

Retaliation Claim

A retaliation claim arises under Title VII when an employee engages in an activity protected under this statute and suffers an adverse employment action as a result.  In this instance, the Court held that insufficient evidence had been presented to establish a good faith and reasonable belief that the questioning of the relationship was unlawful sexual harassment.  Owens had even acknowledged that several employees complained of a conflict of interest she had with Kobussen.  In light of these complaints, the Court held there was no good faith basis for Owens to believe the questioning was sexual harassment.

FLSA Claim

The Court held that in order for Owens to survive summary judgment on her FLSA claim, she must establish a causal link between the protected activity (reporting potential FLSA violations to Old Wisconsin) and her termination.  The facts in the record established that Owens reported the potential FLSA violations to Old Wisconsin in July and October 2011 (unconnected to her April 2012 termination) and had actually received a work performance bonus in November 2011 (after the reports were made to Old Wisconsin.)  Based upon the foregoing, the Court held no valid retaliation claim under the FLSA could proceed.

Judgment:  The Seventh Circuit Court of Appeals affirmed summary judgment in favor of the employer and held that no discrimination or retaliation claim under Title VII of the Civil Rights Act of 1964 or retaliation claim under the Fair Labor Standards Act existed as the employer lawfully terminated an HR manager for failing to disclose a relationship with a subordinate and her subsequent refusal to answer questions about the relationship once other employees complained.

The Takeaway:  Quite the case, huh?  While the Court's opinion was concise and to the point, there was certainly a lot to unpack here...given the claims and causes of actions asserted by Owens.  

I will point out that while it appears a "boys club" might have existed at Old Wisconsin (and it is arguable that Owens might not have fit into the work environment), the Court was correct to distinguish that many of these alleged instances were unrelated to the adverse employment actions Owens alleged.  Based upon the caselaw, Owens simply could not prevail on any of her claims.  The Court was correct to conclude that there was insufficient evidence to establish that Owens' sex caused the termination.  In this instance, the evidence of her substandard work performance coupled with her refusal to answer questions about her relationship with Kobussen (after complaints had been made about a conflict of interest) is what ultimately doomed her case.  With Owens unable to establish that this termination was because of her sex, the Court reached the proper conclusion and upheld summary judgment in favor of Old Wisconsin.

Majority Opinion Judge:  Circuit Judge Rovner

Date:  August 31, 2017

Opinion:  http://hr.cch.com/eld/OwensOldWisconsin083117.pdf