- Supreme Court of Texas Holds "Motivating Factor" Is Causation Standard in All TCHRA Cases
- June 18, 2003 | Author: Christopher A. Knepp
- Law Firm: Vinson & Elkins LLP - Austin Office
The Supreme Court of Texas has held that the correct standard of causation applicable in all TCHRA discrimination cases, whether tried under a pretext or mixed-motive analysis, is the "motivating factor" standard. In Quantum Chemical Corp. v. Toennies, No. 99-1042 (Tex. March 8, 2001), the trial court instructed the jury "that an employer commits an unlawful employment practice if, because of age, the employer discharges an individual." The trial court rejected plaintiff's proposed instruction "that an unlawful employment practice is established when the Plaintiff demonstrates that his age was a motivating factor for his discharge, even if other factors also motivated the discharge." Plaintiff's proffered charge was based on the language of Tex. Labor Code § 21.125, an amendment to the TCHRA entitled "Clarifying Prohibition Against Impermissible Consideration of Race, Color, Sex, National Origin, Religion, Age or Disability in Employment Practices," while the court's instruction tracked the language of §21.051, entitled "Discrimination by Employer." During its deliberations, the jury sent out a note asking the judge whether plaintiff had to show that his age was "the sole determining factor" in his termination, or just that it was "a determining factor" in that decision. The judge refused to provide further instruction, and the jury ultimately returned a verdict for the employer. Plaintiff appealed, and the First District Court of Appeals reversed the judgment finding that the trial court had erred by refusing plaintiff's proffered "motivating factor" instruction. The Supreme Court granted certiorari to address the proper burden and instruction in TCHRA cases.
Like its federal counterpart, Section 107 of the Civil Rights Act of 1991, the Texas amendment provides that "an unlawful employment practice is established when the complainant demonstrates that [a protected trait] was a motivating factor for an employment practice, even if other factors also motivated the practice," Tex. Labor Code §21.125(a), and allows a defendant to limit the damages recoverable to declaratory or injunctive relief, attorneys' fees and costs by showing that it "would have taken the same action in the absence of the impermissible motivating factor." Tex. Labor Code §21.125(b). Section 21.125 was added to the Texas statute after the Civil Rights Act of 1991 amendments to Title VII in conformity with the TCHRA's stated purpose to "provide for the policies of Title VII . . . and its subsequent amendments."
The Supreme Court noted that "[e]ven though the statutory language appears to provide that "a motivating factor" is the causation standard in all TCHRA/Title VII alleging unlawful employment practices, federal case law makes the issue less clear than it appears." The Court was referring to two federal circuit court cases cited by Quantum that hold that the causation standard applicable to pretext cases remains a "but for" standard, even after the cited amendments to Title VII, and that the added "motivating factor" standard is to be applied only in cases in which plaintiff has "direct evidence" of discrimination, i.e. "mixed-motive" cases. Watson v. Southeastern Penn. Transp. Auth., 207 F.3d 201(3rd Cir. 2000), cert. denied, 69 U.S.L.W. 3552 (2001); Fuller v. Phipps, 67 F.3d 1137, 1143 (4th Cir. 1995). These courts reasoned that the Civil Rights Act of 1991's "motivating factor" provisions were meant to deal with the Supreme Court's decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), a mixed-motive case in which the Court ruled that, even where plaintiff proved through direct evidence that an improper motive played a role in the challenged decision, the employer could escape liability entirely by showing that it would have made the same decision in the absence of the impermissible factor. The Texas Supreme Court also noted that the U.S. Supreme Court has stated in dicta that section 107 "responds to [Price Waterhouse] by setting forth standards applicable in 'mixed-motive' cases." Landgraf v. USI Film Prods., 511 U.S. 244, 251 (1994).
Turning to the correct interpretation of the TCHRA, the Court found that, notwithstanding these federal decisions, the "plain language of the unambiguous statute" compels a finding that §21.125(a)'s "clarification" applies to all cases under the TCHRA, whether tried under a pretext or a mixed-motive theory. Thus, the Court held that the trial court had erred in refusing to give the "motivating factor" instruction in this pretext case. Citing the "obvious confusion" of the jurors resulting from the erroneous "because of" instruction -- evidenced by their initial deadlock and inquiry to the judge as to whether the standard required a finding that age was the "sole factor" leading to plaintiff's discharge or just a factor in that decision -- the Court agreed with the court of appeals that the "because of" instruction probably caused the rendition of an improper judgment and thus was reversible error. Moreover, the Court rejected Quantum's argument that plaintiff failed to preserve error by offering the "motivating factor" instruction without the "same decision" defense contained in §21.125(b). The Court held instead that it is the defendant's burden to plead and proffer instructions on the "same decision" test to limit liability if a "motivating factor" is established.
Finally, the Court rejected Quantum's argument that there was legally insufficient evidence of age discrimination to warrant sending it to the jury even under the "motivating factor" standard. This secondary holding of the Court, that plaintiff produced sufficient evidence of age discrimination to warrant a jury determination on the issue, may be as troubling as the causation holding. Challenging Quantum's articulated reason for plaintiff's termination, poor performance, plaintiff offered anecdotal evidence from co-workers suggesting that he was a good performer. Plaintiff's proffered evidence on this point consisted of testimony from a senior project engineer at Quantum who had worked with plaintiff and found him to be "an above average engineer;" a letter from a co-worker to plaintiff's supervisor commending plaintiff's performance; e-mails from co-workers praising his work on projects during the time Quantum found his performance to be unacceptable; and notes from his supervisor commending certain aspects of his performance. The Court found this to be "more than a scintilla" of evidence contradicting Quantum's proffered reason for plaintiff's discharge and noted that, under Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000), disproving defendant's articulated reason for discharge "is ordinarily sufficient to permit the trier of fact to find that the employer was actually motivated by discrimination." The Court thus remanded the case to the trial court for further proceedings.
Justice Hecht filed a dissenting opinion, joined by Justice Owen, asserting that the "motivating factor" test should apply only to mixed-motive cases and that the "determining factor" test is still the correct standard for pretext cases. Justice Hecht found the federal court decisions cited by Quantum to be persuasive on this point and also noted that, in Reeves, the U.S. Supreme Court referred without disapproval to an instruction in a pretext case requiring a showing that the protected characteristic was a "determining factor" in the challenged decision. The dissent also recognized that should the Fifth Circuit ultimately join the other circuits that have held the "motivating factor" standard applicable to mixed-motive cases only, the Court's opinion will create an incentive for Texas plaintiffs to forum-shop in favor of the state courts, thus defeating a stated purpose of the TCHRA. Justice Hecht also opined that the Court's holding on the legal sufficiency of the evidence will make it more difficult for an employer to prevail at the pretext stage in a performance-related discharge when plaintiff can offer evidence of previous positive performance feedback. In his words, "in effect, the Court holds that an employer who terminates an employee for two years' consistently poor performance may be liable for discrimination if the employee's performance was ever satisfactory at any time, or if co-workers have sometimes been supportive." Contrary to the majority, the dissenting judges would have found insufficient evidence of age discrimination to support plaintiff's claim.
Practical Import: Contrary to the TCHRA's stated purpose to correlate state law with federal law, this decision creates a major rift between Texas federal and state courts in the litigation of employment discrimination claims. First, as the discussion above and the decision itself shows, the Court's ruling is contrary to the great weight of federal decisions in holding that the "motivating factor" standard, instead of the "determining factor" standard, applies to pretext cases. As Justice Hecht notes, this schism will likely result in plaintiffs forum-shopping their pretext cases to Texas state courts to avail themselves of the lesser causation standard. Perhaps even more drastic, however, is the Court's holding regarding the sufficiency of the evidence offered. Specifically, by holding that a plaintiff may rebut an employer's performance-based decision with evidence of positive feedback from co-workers, the Texas Supreme Court has turned its back on the wealth of jurisprudence establishing that the purpose of anti-discrimination laws is not to turn the courts into "super-personnel boards" to scrutinize employers' business decisions. See, e.g., Shackelford v. Deloitte & Touche LLP, 190 F.3d 398, 408 (5th Cir. 1999) (noting that "merely disputing [the employer's] assessment of . . . work performance will not necessarily support an inference of pretext")(and cases cited therein). Additionally, after this decision, employers should be sure to plead "same decision" as an affirmative defense in all TCHRA discrimination cases and to offer a jury instruction on that point as well.
There is some good news - shortly following the Court's decision, legislation was offered in both chambers of the Texas legislature which would legislatively overturn the Court's holding on the causation issue and clarify the evidentiary issue as well. These bills, HB 3615 and SB 1721, introduced by Rep. Kenneth "Kim" Brimer and Sen. John Carona respectively, would make clear that the "motivating factor" standard applies only in cases where the plaintiff has direct evidence of discrimination. In other cases, i.e., pretext cases, the plaintiff would have to prove that "but for the complainant's [protected characteristic], the employer would not have taken the action which the [plaintiff] alleges is discriminatory." Moreover, the bills would prevent opinions or statements from persons who did not participate in the allegedly discriminatory decision or performance appraisals conducted more than one year prior to the challenged action from being considered as evidence of pretext. Finally, the proposed legislation explicitly states that Texas courts must apply the same standards as federal courts in evaluating evidence.