When counseling employers about the risks of terminating an employee, the adage “use it or lose it” often comes to mind. That is, if an employee’s behavior warrants termination, but the employer chooses to ignore it or even to give the employee a lesser discipline, the concern arises that it may be difficult to include the behavior as justification for a future termination decision.

The employee will argue: “If my behavior was so bad, why was I not terminated for it at the time?” while the employer runs the risk of having to justify leniency toward the employee.

This conundrum was at the heart of a recent decision of the U.S. District Court for the Eastern District of Pennsylvania in Klastow v. Newtown Friends School , No. 10-6079, 2012 U.S. Dist. LEXIS 79185 (E.D. Pa. June 6, 2012).

Alleged Misuse of school credit cards

According to the opinion, Bruce Klastow, born in 1949, was a longtime math and history teacher at Newtown Friends School in June 2008, when it was discovered by the school’s business manager that he had used the school’s credit card for personal purchases. Klastow explained that he had used the card when he did not have his own card with him, and that the school could expect to see additional charges on the next billing statement. He promised, however, that this would not recur.

Despite this vow, the opinion said, additional personal charges allegedly appeared on the school’s card in September 2008. When these charges appeared, Klastow was warned by the head of the school that any additional use of the card would result in his termination. Klastow repaid all of the personal charges to the school and was allowed to teach in the fall of 2008.

In March 2009, the school terminated a woman with whom Klastow shared a “personal relationship,” the opinion said. In that same month, a discrepancy was discovered in expenses and funds collected by the school’s ski club. Klastow handled the finances for the club and, because of difficulty in collecting the money from Klastow, the head of the school was forced to direct Klastow to leave the school and to return with the missing funds. Klastow did so, but the funds were still insufficient. The school ultimately dropped its attempts to collect the remaining funds because to do so would have required direct contact with the students, according to the opinion.

Speech at Meeting for Worship

In late April 2009, Klastow spoke at a “meeting for worship,” a gathering of Quakers, and members of the community were encouraged to speak about issues of interest to the community. While the subject of Klastow’s speech was “leadership,” and the school’s administration was not named, some members of the school community interpreted the comments as an attack on the head of the school and other senior leaders of the school, according to the opinion.

A few weeks after the meeting, with just a short time left in the school year, Klastow was placed on paid leave and was subsequently informed that his contract for the following year would be rescinded. Klastow brought suit against the school claiming age discrimination and retaliation.

No retaliation claim

The school moved for summary judgment at the close of discovery. While the court found that Klastow had set forth a prima facie claim of age discrimination (there was a genuine issue of fact as to whether he was replaced by someone younger), the only evidence of “protected activity” necessary to establish a retaliation claim was what the court termed Klastow’s “self-serving” testimony that he “mentioned” the subject of age discrimination to a member of the school’s administration when discussing the termination of his colleague and the fact that other older teachers appeared to be targeted by the school. The court found, however, that there was no evidence that this complaint, even if made, was valid, and, as such, Klastow could not have held “an objectively reasonable belief that he was opposing age discrimination.” As such, Klastow failed to establish a prima facie claim of retaliation.

With respect to the age discrimination claim, the school offered the credit card incident, the ski club accounting discrepancy and the meeting for worship speech as legitimate, nondiscriminatory reasons for Klastow’s termination.

Pre-renewal acts part of termination decision

Notably, while the meeting for worship speech occurred just a few weeks before the termination decision, the other issues occurred before the school year even began (credit card) and approximately two months before the decision (ski club funds). Klastow argued, therefore, that the school had renewed his one-year teaching contract after the incidents, which, he argued, indicated that the incidents could not have genuinely been a part of the termination decision.

The school responded, however that these aged incidents were part of a “history of … improper conduct, which culminated in his actions at the … meeting for worship.” The court agreed and found that the contract renewal did not evidence pretext. The court found no other evidence of pretext and summary judgment was granted to the school.

Analysis

While considering the credit card and ski club incidents in the termination decision may not have evidenced pretext on the basis of age, including them as reasons for the decision months after they occurred could be seen as casting doubt on “the true reason for the decision.” That is, there would seem to be little doubt that Klastow could have been terminated for either incident — both of which involved an apparent misuse of school funds or property. The incidents would seem to be unrelated to the meeting for worship speech, which appears to be, colloquially, “the straw that broke the camel’s back.” It is unclear whether the speech alone would have justified Klastow’s termination.

It is certainly understandable why the school would want to use the earlier incidents, but the issue raised by their inclusion as the reason for termination case will continue to be a part of the pretext argument in all types of cases. •

Sid Steinberg is a partner in Post & Schell’s business law and litigation department. He concentrates his national litigation and consulting practice in the field of employment and employee relations law. Steinberg has lectured extensively on all aspects of employment law, includingTitle VII, the FMLA and the ADA.