Title VII retaliation claim reinstated

Trial judge erred in ruling plaintiff resigned

Eric T. Berkman//March 11, 2022

  • Forsythe v. Wayfair Inc.
  • THE ISSUE:Could an employee who claimed her employer terminated her after concluding that her complaints of sexual harassment by a colleague could not be corroborated bring a retaliation claim under Title VII of the Civil Rights Act of 1964?
  • DECISION:Yes (1st U.S. Circuit Court of Appeals)
  • LAWYERS:Robert E. Goodman Jr. of Kilgore & Kilgore, Dallas; Jonathan J. Margolis of Powers, Jodoin, Margolis & Mantell, Boston (plaintiff)
Lynn A. Kappelman and Dawn Reddy Solowey, of Seyfarth Shaw, Boston (defense)

The 1st U.S. Circuit Court of Appeals has found that an employee who claimed her employer terminated her after concluding that her complaints of sexual harassment by a colleague could not be corroborated could bring a retaliation claim under Title VII of the Civil Rights Act of 1964.

After defendant Wayfair Inc.’s internal investigator informed plaintiff Emily Forsythe that he could not substantiate her allegations of inappropriate touching and conversation by a co-worker, Forsythe told him that she would be interested in a severance package as the best path forward. She asked him to present her request to the company, stating, “You guys start, and then I’ll have my lawyer work with you at that point.”

The following week, the company sent Forsythe an email with a severance agreement attached, stating that it had “accepted her resignation.”

A U.S. District Court judge granted summary judgment on her subsequent retaliation claim, finding that Wayfair reasonably believed Forsythe had resigned and nothing in the record indicated that such an explanation was pretext for retaliation.

But the 1st Circuit reversed.

“[G]iven that a reasonable juror could find … that Forsythe had never offered to resign and had merely inquired about a severance package, we conclude that a reasonable juror also could find that Forsythe reasonably understood [the employer’s] email purporting to accept her offer to resign as an involuntary termination of her employment rather than an innocent misinterpretation of her earlier request,” Judge David J. Barron wrote for the court. “Accordingly, we cannot agree with the District Court that, as a matter of law, Forsythe resigned and so for that reason was not subject to an adverse employment action.”

The 1st Circuit also reinstated Forsythe’s disparate treatment claim while affirming summary judgment on her claim that Wayfair did not adequately investigate her sexual harassment allegations.

The 38-page decision is Forsythe v. Wayfair Inc., Lawyers Weekly No. 01-062-22.

‘Too clever by half’

Boston attorney Jonathan J. Margolis, who represented the plaintiff, said his client was gratified that the 1st Circuit reinstated her claims.

“The District Court clearly made factual findings in awarding summary judgment, which is not permitted,” Margolis said. “In particular, the District Court held that Ms. Forsythe had resigned from her position, although the record is crystal clear that she said she might resign if the company offered her a ‘compelling’ package. The defendant offered no package at all but simply fired her. Yet, somehow the court below twisted those undisputed facts into a resignation, which was plainly erroneous.”

Robert E. Goodman Jr. of Dallas, who also represented Forsythe, said Wayfair was “too clever by half.”

Goodman said Wayfair thought treating Forsythe’s expression of interest in a severance package as an offer to resign was “a very clever way to get her out of their hair for having complained about harassment — and we called them on it. From my standpoint, we were right for claiming that position throughout the litigation.”

Wayfair’s attorney, Lynn A. Kappelman of Boston, did not respond to requests for comment.

But Samantha C. Halem of Wellesley, who represents employers, said she was not surprised the 1st Circuit found that a request for a severance package in circumstances like those in Forsythe was not akin to a voluntary resignation.

“A reasonable juror could find that this employee, upon learning that she would have to continue to work alongside a person she accused of harassment, might want to find an alternative solution and accordingly asked about severance,” Halem said. “But that is not a resignation. Rather, it is just the beginning of the interactive process that human resources needs to follow, step by step.”

Matthew J. Fogelman of Newton Center said the ruling will be important going forward.

“It wouldn’t be completely uncommon for an employee, in the course of a conversation with their employer or with HR, to bring up the idea that they might leave and maybe they could get a severance package,” he said. “The idea that an employee can’t raise that possibility because doing so might get construed as an offer to resign just seems like way too broad an interpretation that would have negative repercussions for the employment world in general.”

Boston attorney Rebecca Pontikes said she found the court’s reversal of summary judgment on the plaintiff’s disparate treatment claim to be particularly valuable.

“It’s helpful that the court said that evidence of pretext in one context — in this case, the retaliation piece — could be used by a jury in combination with the prima facie claim of gender discrimination and lead to a finding of discrimination,” Pontikes said.

At the same time, though, Pontikes said she was disappointed that the 1st Circuit so easily upheld the trial judge’s finding on the sufficiency of the investigation.

“It looks like the employer interviewed some people and decided that since it’s her word against his, and [the other person they interviewed] could not corroborate her, there must be no way to substantiate it,” she said. “That sort of investigation is quite perfunctory. They’re certainly doing this to comply with the law, but to me it’s why the employer internal investigation is a flawed method of taking care of these things.”

Request for severance

Forsythe began working for Wayfair, an online furniture retailer, as a senior manager in 2017.

On Aug. 14, 2019, she emailed Matt Witte — her former direct manager who now held a different supervisory position — describing inappropriate conduct by co-worker Michael McDole.

According to her email, McDole had moved his chair next to hers and placed his hand on her leg during a January 2019 meeting in California; moved his chair so that his legs touched hers during a March 2019 meeting in Boston; and touched the buttons running up the middle of her shirt at another California meeting in July 2019.

On the day of the third incident, McDole allegedly initiated a discussion with Forsythe about online dating apps and asked her about her dinner plans. On other occasions, he apparently communicated with her in an inappropriate manner, sending aggressive, critical emails.

Several days after receiving Forsythe’s email, Witte forwarded it to HR. An HR employee, Trevor Shaffer-Figueroa, then began an investigation into the allegations.

After completing his investigation, Shaffer-Figueroa told Forsythe on Sept. 16, 2019, that her allegations were unsubstantiated.

The next day, Forsythe emailed Shaffer-Figueroa alleging that another Wayfair employee, Kory McKnight, who had become her direct supervisor a month earlier, threatened to “get her off his team.” In her email, she said that because McKnight was aware of her allegations against McDole, she felt she was being retaliated against.

On Thursday, Sept. 19, Shaffer-Figueroa apparently told Forsythe he could not substantiate that allegation either. Forsythe, recording the phone call, then told him she would be interested in talking to HR about putting together a “compelling severance package.”

Shaffer-Figueroa responded that while he could not commit to anything, he could present her request and asked what she meant by “compelling.”

Forsythe responded: “You guys start, and then I’ll have my lawyer work with you at that point.”

On Sept. 20, Forsythe requested a paid day off. Both that day and over the following weekend she continued to check work-related emails and expected to take a business trip to Atlanta that Tuesday.

However, on Monday, Sept. 23, she received an email from Shaffer-Figueroa that apparently contained a “separation agreement” and that indicated that Wayfair had accepted her resignation.

Though Wayfair apparently did not specifically instruct Forsythe not to travel to Atlanta, she did not take the trip because she believed she had been terminated.

Forsythe ultimately sued Wayfair in federal District Court, where Judge Richard G. Stearns granted summary judgment for the defendant on all counts.

The plaintiff appealed.

Opening a negotiation?

The 1st Circuit reversed summary judgment on Forsythe’s retaliation claim.

“[W]e cannot agree with the District Court that, as a matter of law, Forsythe resigned and so for that reason was not subject to an adverse employment action,” Barron wrote for the panel. “Rather, we conclude that the record provides a supportable basis for concluding that even though she had never made an offer to resign, she was treated as if she had and thereby terminated from her employment against her wishes.”

The court also reversed summary judgment on her disparate treatment claim, noting that not only did she allege retaliation, the record showed that she was replaced in at least some of her job duties by a man.

“[G]iven the showing that Forsythe has made as to each of the elements of the prima facie case and the fact that she has supportably shown not merely that Wayfair’s stated reason for ending her employment at the company was false but that Wayfair knew that it was false, Forsythe has supportably shown what she must for this claim to survive summary judgment,” Barron said.

Still, the court affirmed summary judgment on her charge that Wayfair failed to conduct a reasonable investigation, rejecting her contention that Wayfair’s alleged failure to affirmatively ask her for outside corroboration created a jury question on the issue.

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