Court finds employer’s business judgment is BS

August 24, 2017
By: Charles Lamberton


The so-called “business judgment” rule is subject to the “BS” rule; if the facts show that the employer’s business judgment isn’t credible, the claims will go to trial. A recent example comes from a New York federal court in Roa v. Staples, Inc., August 9, 2017, Briccetti, V.

The issue in Roa was whether the employer fired the plaintiff because of her disability, or whether it fired her for stealing a bag of potato chips. The plaintiff was diagnosed with several medical conditions that restricted her from lifting over ten pounds, raising and reaching her arms above her shoulders, turning and twisting her neck, operating electric machinery, and performing repetitive motions. She was put on “light duty,” which under Staples’ policy was a temporary modification, not to exceed six months. Her restriction from operating machinery reduced her productivity, and her coworkers voluntarily assisted her, sometimes staying after their shifts ended.

The plaintiff’s supervisor sent an email to the HR manager asking “Do we know how long we have to accommodate [the employee]?” He also stated that he had the employee working within her restrictions but her condition was getting worse and she had only been “hitting just 40% of her individual productivity.” In March, the supervisor emailed HR to recommend the employee’s pay be reduced since she wasn’t able to do as much. HR responded that they could not do this due to “disability laws,” and noting that it was important to not make changes because “her injury cases have gone into litigation.” The email also stated: “I know it’s been a long time but I promise there will be a resolution.”

A worker later complained to loss prevention that a bag of chips was stolen from his lunch bag. The investigator testified that he did not remember exactly how he investigated but he reviewed video footage and saw the employee remove something indiscernible from the bag. He also said she had been a suspect in a prior theft of a yogurt from the refrigerator. The record reflected that this investigation was unusual because the investigator relied only on the worker’s complaint and did not interview the employee or anyone else. Also, the HR manager didn’t review the video (which was not preserved) before approving the employee’s termination for theft. The HR manager testified that an honest mistake would not constitute theft. Nonetheless, the employee was fired for theft, even though she asserted in the termination meeting that she took a bag of chips because she mistakenly thought her sister left them for her, and did not commit theft.

Denying Staples’ motion for summary judgment, the Court held there was sufficient evidence of discriminatory intent to round out the employee’s prima facie case and to raise triable issues on pretext. For example, the plaintiff testified that her supervisor, who was involved in the termination decision, often expressed dissatisfaction with her restrictions, commented on her extended light-duty status, made demeaning gestures and expressions about her disabilities, and assigned her undesirable tasks, such as cleaning. There were also the emails to HR expressing frustration at her reduced productivity because of her disabilities and suggesting her pay be cut. Also, the employee was replaced with someone who could perform functions the plaintiff could not.

The court also found it significant that the alleged theft in question was a one-time event involving a single serving of chips, rather than a pattern of thefts or theft of a valuable item. Moreover, Staples failed to preserve crucial evidence used to make the termination decision and failed to interview a crucial witness (the employee’s sister).