Stephen Bergstein
Stephen Bergstein ()

The U.S. Court of Appeals for the Second Circuit has reversed summary judgment in a Title VII retaliation case that sheds further light on the ways plaintiffs can prove that management terminated their employment for pretextual reasons. The case also applies the Supreme Court’s new standard governing the plaintiff’s burden of proof in retaliation cases.

In Kwan v. The Andalex Group,1 decided on Dec. 16, 2013, the plaintiff worked as vice president of acquisitions for a real estate firm. She was hired in April 2007 and was terminated on Sept. 26, 2008. While defendant argued that it terminated plaintiff for performance deficiencies, she claimed her termination was retaliatory, occurring about three weeks after she complained that she was treated differently from the men in salary and bonuses. After the district court granted summary judgment on the retaliation claim, plaintiff appealed. Finding that the jury may rule in plaintiff’s favor on this claim, the Second Circuit remanded the case for trial.

Corporate Knowledge

The large body of Title VII case law in the Second Circuit leaves little room for uncharted territory. The court revisited some of these cases in Kwan. While the defendant argued that plaintiff did not make out a prima facie case of retaliation because the decision-maker did not know she had engaged in protected activity, the Second Circuit disagreed. “[A] plaintiff may rely on ‘general corporate knowledge’ of her protected activity to establish the knowledge prong of the prima facie case.”2 As plaintiff complained about discrimination to a corporate officer, “[t]his complaint was sufficient to impute to Andalex general corporate knowledge of the plaintiff’s protected activity.”3

The court explained the utility of the “general corporate knowledge” doctrine: “This case is a good illustration of why corporate knowledge is sufficient for purposes of a prima facie case of retaliation. If that were not true, a simple denial by a corporate officer that the officer ever communicated the plaintiff’s complaint, no matter how reasonable the inference of communication, would prevent the plaintiff from satisfying her prima facie case, despite the fact that the prima facie case requires only a de minimis showing.”4

Shifting Explanations

Another line of cases allows the plaintiff to prove she was fired for pretextual reasons upon a showing that the employer has offered shifting, or inconsistent, reasons for her termination.5 In Kwan, the Second Circuit further explored this theory. Prior to the litigation, defendant’s lawyer stated that the business focus had changed and plaintiff was no longer suitable for the position. The letter also criticized plaintiff’s job performance. When plaintiff next filed an Equal Employment Opportunity Commission charge, defendant’s position statement in response to that charge again mentioned the company’s new business focus. The introduction to that statement did not cite poor job performance, and the body of the position statement largely focused on the new business priorities, though it made “brief reference” to plaintiff’s performance deficiencies.

As the Second Circuit wrote, “any fair reading of Andalex’s Position Statement to the EEOC indicates that Andalex claimed that Kwan was fired primarily because its business focus had changed.” However, in deposition, the company’s chief financial officer said the company’s business focus had already changed when plaintiff was hired. He said plaintiff was not fired because of the new business focus but because of poor job performance. But another member of management testified that “plaintiff’s termination was the ‘culmination of her poor performance and the fact that…our business model had begun to change.’” In the Second Circuit, defendant justified plaintiff’s termination based on three discrete incidents of poor performance. Only one of those reasons was cited in the defendant’s EEOC position statement.

Shifting explanations are among the ways that plaintiffs can challenge the defendant’s proffered legitimate reason for the adverse action.6 Over Judge Barrington Parker’s dissent, the Second Circuit majority deemed management’s various reasons for plaintiff’s termination sufficiently distinct to support the inference that she was fired for pretextual reasons, and that the jury may conclude that she suffered retaliation for complaining about discrimination. The court concluded, “Andalex’s inconsistent and contradictory explanations for the plaintiff’s termination, combined with the close temporal proximity between the Sept. 3 conversation and Kwan’s termination, are sufficient to create a genuine dispute of material fact as to whether Kwan’s Sept. 3 complaint of gender discrimination was a but-for cause of the plaintiff’s termination.”7

‘But-For’ Causation

While the Second Circuit did not break new ground in applying the “general corporate knowledge” or “shifting explanation” theories, its reasoning sheds further light on how these rules apply in Title VII retaliation cases. However the Second Circuit entered new territory on another element of the plaintiff’s burden of proof: “but-for causation,” articulated by the Supreme Court for the first time in retaliation cases in University of Texas v. Nassar.8 Decided in June 2013, Nassar held that, to prevail, the plaintiff must show the employer’s unlawful motive was the “but-for,” or determinative, factor in her termination.9 This holding rejected the more plaintiff-friendly standard that allowed the plaintiff to prevail if the employer’s unlawful motive was a substantial or motivating factor in the adverse action. Under that test, the plaintiff could prevail if unlawful motive was one among several reasons for her termination. Prior to Nassar, the Second Circuit applied the “substantial or motivating factor” test.10

While Nassar’s new standard favors defendants, the question remains: How much evidence must the plaintiff proffer to avoid summary judgment in Title VII retaliation cases? In other words, how do we distinguish “but-for causation” from the “substantial or motivating factor” test?

In Kwan, the Second Circuit applied the “but-for” test in a published decision for the first time. Borrowing language from its “motivating factor” cases, the Second Circuit held that “[a] plaintiff may prove that retaliation was a but-for cause of an adverse employment action by demonstrating weaknesses, implausibilities, inconsistencies, or contradictions in the employer’s proffered legitimate, nonretaliatory reasons for its action. From such discrepancies, a reasonable juror could conclude that the explanations were a pretext for a prohibited reason.”11 This language suggests that the plaintiff’s burden has not substantially changed from the Second Circuit’s prior “substantial or motivating factor” test, at least on a motion for summary judgment.

The court confirmed this, stating: “‘but-for’ causation does not require proof that retaliation was the only cause of the employer’s action, but only that the adverse action would not have occurred in the absence of the retaliatory motive.”12 Moreover, under traditional tort law, “a plaintiff’s injury can have multiple ‘but-for’ causes, each one of which may be sufficient to support liability.”13 The court explained, “[r]equiring proof that a prohibited consideration was a ‘but-for’ cause of an adverse action does not equate to a burden to show that such consideration was the ‘sole’ cause.”14 The court added,

[i]n this case, the parties have put forward several alleged causes of the plaintiff’s termination: retaliation, unsuitability of skills, poor performance, and inappropriate behavior. The determination of whether retaliation was a “but-for” cause, rather than just a motivating factor, is particularly poorly suited to disposition by summary judgment, because it requires weighing of the disputed facts, rather than a determination that there is no genuine dispute as to any material fact. A jury should eventually determine whether the plaintiff has proved by a preponderance of the evidence that she did in fact complain about discrimination and that she would not have been terminated if she had not complained about discrimination.15

Parker’s Dissent

Parker’s dissent highlights an area of disagreement that has explicitly surfaced for the first time in the Second Circuit: whether plaintiffs in Title VII retaliation cases must show the employer’s articulated reason for their termination was pretext for retaliation. In non-retaliation cases (i.e., failure to promote or wrongful discharge cases), pretext alone will not entitle the plaintiff to victory. The plaintiff must show pretext for discrimination. Under the totality of the circumstances test, the Second Circuit generally affirms summary judgment when the plaintiff only proffers evidence of pretext without additional evidence of discrimination, i.e., biased remarks from a decision-maker, a pattern of discrimination or a heavy showing of pretext.16 The Second Circuit generally does not apply the “pretext-plus” standard in retaliation cases. However, Parker would do so. He explained:

As we explained in Schnabel v. Abramson,17 even where a plaintiff has demonstrated pretext, rather than simply applying a per se rule precluding summary judgment for the defendant, we must instead employ a “case-by-case approach” and “examin[e] the entire record to determine whether the plaintiff could satisfy h[er] ‘ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff.’” While Schnabel dealt with an age discrimination claim, this approach applies to retaliation claims as well. In conducting this “case-by-case” analysis, “[t]he relevant factors ‘include the strength of the plaintiff’s prima facie case, the probative value of the proof that the employer’s explanation is false, and any other evidence that supports [or undermines] the employer’s case.’”18

Parker’s approach would make it easier for defendants to win summary judgment in Title VII retaliation cases. In Kwan, the Second Circuit majority appeared to reject that approach, reasoning that the jury may find that plaintiff’s prima facie case, along with the “inconsistent and contradictory explanations for the plaintiff’s termination,” constituted a but-for cause of the adverse decision.19 This disagreement confirms that, 50 years after Congress enacted Title VII, experienced federal judges still disagree on how to apply this statute in routine cases.

Stephen Bergstein is a partner at Bergstein & Ullrich, in Chester, N.Y.


1. —F.3d—, 2013 U.S. App. LEXIS 24838 (2d Cir. Dec. 16, 2013).

2. Id. at *21 (citing Gordon v. N.Y.C. Bd. of Educ., 232 F.3d 111, 116 (2d Cir. 2000)).

3. Id. at *22 (citing Reed v. A.W. Lawrence & Co., 95 F.3d 1170, 1178 (2d Cir. 1996)).

4, Id. at *23.

5, See, e.g., EEOC v. Ethan Allen, 44 F.3d 116, 120 (2d Cir. 1994); Schmitz v. St. Regis Paper, 811 F.2d 131, 132 (2d Cir. 1987).

6. Id. at * 28-29 (citations omitted).

7. Id. at *25-26.

8. 133 S.Ct. 2517 (2013).

9. Id. at 2526.

10. See, e.g., Raniola v. Bratton, 243 F.3d 610, 625 (2d Cir. 2001).

11, 2013 U.S. App. LEXIS 24838, at *28-29 (citations omitted).

12. Id. at * 26.

13, Id. at *26, n.5.

14. Id.

15. Id.

16. See, Bergstein, “Pretext Plus in the Second Circuit: Where It’s Been, Where It’s Going,” New York State Labor and Employment Law Journal, Fall 2010.

17. 232 F.3d 83, 90 (2d Cir. 2000) (the author represented the plaintiff in Schnabel).

18. 2013 U.S. App. LEXIS 24838, at *40-41 (Parker, J., dissenting) (citing James v. N.Y. Racing Ass’n, 233 F.3d 149,156 (2d Cir. 2000)).

19. Id. at *25-26.