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Though it attracted little attention in the media, the U.S. Supreme Court’s decision last term in Desert Palace, Inc., v. Costa has the potential to make life much more difficult for employers. Desert Palace effectively diminishes the plaintiff’s burden of proof in many, if not all, Title VII discrimination cases. The upshot? More plaintiffs will get their Title VII discrimination claims to juries more often, and these claims will be far more difficult to defeat. General counsel not only need to pay close attention to this decision, but also consider how they will respond to these types of cases, both defensively and proactively. The seemingly narrow question at stake in Desert Palace was whether plaintiffs need to present direct (i.e., “smoking gun”) evidence of discrimination in order to be entitled to a “mixed motive” jury instruction (in which jurors are told they may find against the defendant even if only one of several reasons for the contested employment decision is illegal). In the past, if the employer produced a valid, nondiscriminatory reason for a contested action, the plaintiff had to counter with direct evidence in order to have the judge give a mixed motive jury charge. Now circumstantial evidence � which is often all that plaintiffs have � is sufficient. The mixed motive instruction is important because it offers plaintiffs a lower threshold for obtaining a verdict of liability. And it’s not only cases that make it to a jury that will be affected. Desert Palace will probably have an even bigger impact on employers at the summary judgment stage. Desert Palace originated with Catharina Costa, a former warehouse worker at Caesars Palace Hotel and Casino in Las Vegas who was fired after fighting with another employee. Costa sued for sex discrimination and harassment, arguing that she was disciplined more harshly than male colleagues were for the same behavior and received less overtime work, and that supervisors often “used or tolerated” sexual slurs against her. The judge gave the jury a mixed motive charge, and they awarded Costa $364,000 in back pay and punitive damages. The U.S. Court of Appeals for the Ninth Circuit overturned the award, but an en banc panel later upheld the verdict. The Supreme Court took up the case in June. In holding that plaintiffs do not need to present direct evidence of discrimination to get a mixed motive jury instruction, the justices looked to the language of the 1991 amendments to Title VII. Specifically, they cited a section that says: “An unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice.” The justices reasoned that this language “unambiguously states that a plaintiff need only ‘demonstrate’ that an employer used a forbidden consideration.” It does not require that a plaintiff supply direct evidence. What kind of evidence is sufficient? The only guidance the Court gave was that a plaintiff could rely entirely on circumstantial evidence, needing only “sufficient evidence for a reasonable jury to conclude . . . that race, color, religion, sex, or national origin was a motivating factor for any employment practice.” This statement can, arguably, be read to mean that almost any Title VII suit that gets to a jury will qualify for a mixed motive instruction. The significance of this lies in just what juries will be asked to decide in Title VII discrimination cases. Historically, the courts required Title VII plaintiffs to prove that discrimination was a determining factor (or “but for” cause) of a challenged employment action. For example, in a case alleging gender discrimination in a firing, the plaintiff had to show that her employer would not have terminated her, but for the fact she was female. The judge typically echoed this requirement in the instructions he gave to the jury. To prevail in a mixed motive case, however, a Title VII plaintiff does not have to prove that his race or gender was a determining factor in an employment decision. Instead, the jury is told that the plaintiff only needs to prove that it was “a motivating factor.” The difference is not simply semantic. Will a wholesale switch to a motivating factor instruction significantly alter the odds of winning a jury verdict? No one knows for sure. (Depending on the jurisdiction, plaintiffs historically have prevailed in 35 � 46 percent of the employment cases tried by juries.) Common sense, however, suggests that there are many cases in which a plaintiff would not prevail under a strict “but for” causation standard but might win under the lesser motivating factor. Indeed, juries may well interpret a motivating factor charge to mean that if the plaintiff’s race, gender, etc., played any part in the challenged decision, then they must find for the plaintiff. According to jury consultant Mark Phillips of Phillips Partners, Inc., in mixed motive cases, jurors who are inclined to believe the employer will find it very hard to take a stand in its support. “Every time a defense-orientated juror seeks to focus on evidence supporting the employer’s legitimate reasons, his or her fellow jurors are likely to respond, ‘Yeah, but there is evidence that her gender played some part in it, too, and that’s all we need to find,’ ” he says. Defense-oriented jurors are even more likely to find themselves backed into a plaintiff’s verdict by virtue of another provision that was added to Title VII in 1991. It provides employers with a defense in a motivating factor case if they can show that they “would have taken the same action in the absence of the impermissible motivating factor.” This defense is typically submitted to the jury in the form of a special interrogatory. For instance, a judge might ask jurors: “If you find that the plaintiff’s gender was a motivating factor in the decision to terminate her employment, do you find that the defendant has proved by a preponderance of the evidence that it would have taken the same action in any event for legitimate reasons?” While they may feel compelled to go along with a finding for the plaintiff on the question of motivating factor, jurors who are inclined to support the employer will probably take comfort in the fact that they can still do so by finding that the employer would have taken the same action in any case. This comfort, however, may be misplaced. An employer that demonstrates that it would have taken the same action regardless gains a defense only against damages, not liability. While the court may not award any damages (or order reinstatement or promotion), it may award the plaintiff attorneys’ fees and costs, as well as enter other types of declaratory and injunctive relief. In many Title VII cases, attorneys’ fees can be greater than the potential cost of damages. Desert Palace is likely to have an even greater impact on defendants at the summary judgment stage. In cases where there is no direct evidence of discrimination, courts have typically utilized a standard, based on a 1973 case, that allows a plaintiff to raise an inference of unlawful discrimination (a so-called prima facie case) through a modest showing based entirely on circumstantial evidence. So when an employer responded with evidence that it took the challenged action for a legitimate nondiscriminatory reason, the employer was presumptively entitled to summary judgment in its favor. Generally speaking, a plaintiff could only avoid summary judgment at this point by challenging the truthfulness of this evidence. And that was extremely difficult to do. Even the Equal Employment Opportunity Commission loses more than half of the summary judgment motions filed by employers. Anecdotal evidence suggests that the summary judgment loss rate for private discrimination plaintiffs is much higher. Desert Palace, however, seems to indicate that the 1991 amendments to Title VII permit an alternative motivating factor theory of proof in every case of intentional discrimination � whether it involves a mixed motive or a single motive. In all likelihood, plaintiffs will now argue that the 1973 standard is no longer controlling law in the summary judgment context and that, once the plaintiff has established a prima facie case, an employer’s evidence that it acted for a legitimate reason, even if unrebutted, is no longer a sufficient basis for granting summary judgment on liability. At least one court has already adopted this reading of Desert Palace. In Dare v. Wal-Mart Stores, Inc., which was decided in June, the plaintiff pled a single motive case, arguing that the retailer refused to hire her only because of her race. Wal-Mart moved for summary judgment on the plaintiff’s Title VII claim, arguing that it had produced evidence of a legitimate reason for its decision, and that the plaintiff had not countered with any evidence that this was not the true reason. Relying on Desert Palace, the court denied Wal-Mart’s motion, and ruled that it could not prevail simply by pointing to a legitimate reason for its decision. The court reasoned that even if a plaintiff failed to prove an employer’s reason was false, the employer should not necessarily be allowed to escape liability. The court reached this decision because an employer could still have unlawfully considered a plaintiff’s protected classification while also considering other factors, one of which it produced in court. Because the plaintiff had established the elements of a prima facie case of hiring discrimination, the Dare court concluded that she could proceed to trial. It will be bad news for employers if, as appears likely, other courts fall in line with the court in Dare and begin applying the motivating factor test to all Title VII claims at the summary judgment stage. This could well mean that any time a plaintiff makes out a prima facie case, a court might deny summary judgment on liability. Given the ease with which most plaintiffs can make such a showing, employers can expect their win rate on summary judgment motions to decrease sharply. And this, in turn, is likely to translate into higher settlement or litigation costs for employers. General counsel should consider these proactive steps:

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