Week Ending 8/24/12: Johnson v. Maestri-Murrell

Alan Schorr’s Case of The Week ending August 24, 2012

Johnson v. Maestri-Murrell Property Management, LLC, 2012 WL 3488553 (5th Cir., August 14, 2012)(unpublished).

The week’s Case of the Week, from Louisiana and the 5th Circuit, highlights the issue of nepotism in private employment, and the danger to employers who do not wish to admit that the reason for an employment action was for the purpose of favoring a friend or relative. While it is understandable that employers may not wish to admit to nepotism for a variety of reason, this case is a brilliant example of the ramifications of such denial in a discrimination case.

Kimberly M. Johnson, an African-American female, applied for a job as assistant manager. She was the only African-American applicant. She was rejected for the position and a Caucasian woman who had a smaller variety of skills and less work-related skills than Ms. Johnson was hired for the position. The woman hired for the job just happened to be the boss’s daughter, who had not even filed an application prior to her interview. If the employer had simply been forthright about hiring the woman because she was the boss’s daughter, there probably would not have been a lawsuit. But the hiring manager, in an attempt to hide the nepotism, told the assistant manager that she did not believe that the employer wanted to hire an African-American candidate. Quick thinking, huh?

The EEOC found probable cause in favor of the plaintiff after she produced evidence that (1) her resume was the only resume that had no handwriting on it; (2) the outgoing assistant manager testified that the hiring manager told her that the Defendant did not want an African-American hired; and (3) the person ultimately hired had substantially less credentials and experience than the Plaintiff. Now, facing Federal litigation, it would have been a good time for the defendant to simply admit that the unqualified Caucasian woman was hired because she was the boss’s daughter, and that the boss had asked for her daughter to be given the job. And that’s exactly what the defendant did. And they succeeded in winning a motion for summary judgment.

As could be expected from Louisiana Federal Court, at Summary Judgment, James T. Trimble, an appointee of George H.W. Bush, disregarded the testimony that the Defendant did not want an African American and found that Ms. Johnson did not establish a prima facie case because she was not qualified for the position. He disregarded the lack of credentials of the daughter who was hired, and held that, even if there was a prima facie case established, the Defendant’s stated reason for termination, nepotism, was a legitimate, non-discriminatory reason for the termination. (He also noted in a footnote that both the boss and her daughter were subsequently terminated for theft).

The Fifth Circuit reversed. Citing the strong evidence by the Plaintiff that she was more qualified, that her resume was never considered, and that the hiring manager had stated that the employer would not hire an African-American, the Circuit Court held that Ms. Johnson had established a prima facie case of discrimination. Oddly, the Circuit Court never addressed the issue of pretext, perhaps because the Trial Court had only mentioned it after dismissing the case for want of a prima facie case. The Circuit Court completely sidestepped the issue of nepotism, which will now be put the jury.

The issue of nepotism is always a thorny issue. Employers, for reasons of reputation or poor morale, often try to hide the reasons for the hiring of a friend or relative. Instead they create a pretextual reason for the termination. The problem is that once the pretextual reason is proven to be false, they leave themselves open for a discrimination lawsuit, as in the case here. Obviously, the better course, legally speaking, would be to simply confess that the hiring was nepotistic. This will not happen often, especially in the case where a boss does not want to admit that he hired or promoted a secret lover. This is a case that should be filed away for those cases, which happen surprisingly often, where an employer invents an indefensible reason for an employment action rather than admitting a more embarrassing but legal reason.

In New Jersey, it has been established that employment decision made for reasons of nepotism does not violate the Law Against Discrimination. In Bumbaca v. Township of Edison, 373 N.J. Super. 239 (App. Div. 2004) a creative attorney attempted to bring an nepotism action under the Law Against Discrimination on the theory that nepotism violates the LAD’s prohibition against discrimination on the basis of “familial status”. The Court rejected the argument and expressly held that nepotism does not violate the LAD. See also White v. Restaurant Depot, 2010 WL 1529594 (D.N.J. 2010) (nepotism does not violate Title VII). Employers who engage in nepotism should carefully consider whether to simply admit the potentially embarrassing fact or create a pretext that could leave them open to a discrimination lawsuit. If they choose the former, the Johnson case will surely help the rejected employees establish a discrimination claim.

UPDATE (9/22/12): Plaintiff's attorney, Charlotte C. McDaniel McGehee, has requested that the following clarifications be appended to this story:

"Comment on your case of the week, week ending August 24, 2012: I am the attorney for Ms. Johnson and wanted to correct some of the information in your blog. First, the actual date the decision to hire the white employee was made has never been admitted. At the time Plaintiff applied for the job, the white employee had not been considered for the job. At the time the Manager, Connie Kimball, told the assistant manager, Stacy Curtis, who was leaving, that she did not beleive the company wanted to hire a black assistant manager, the white employee ultimately hired for the position was unknown to the manager. The manager, Kimball, did not hire the white assistant manager ultimately selected, Ms. Cedatol, but, the VP of Defendant, Linda Jackson, gave authority to Cedatol's mother, the regional manager, Lisa Theriot, to hire Cedatol. Jackson does not recall what date this occurred. Thus, at the time the manager Kimball made a determination that Plaintiff, Ms. Johnson, should not be considered for the job, the manager Kimball had no information on Cedatol. So, at the time Kim Johnson was rejected for the position of assistant manager, Kimball the manager could not have told her that there was a nepotistic hire, Cedatol, coming into the assistant manager position."

Plaintiff’s counsel: Charlotte C. McDaniel McGehee

Defendants’ counsel: Susan W. Furr, Esq., Karleen Joseph Green, Esq., and Betty Burke Uzee, Esq., Phelps Dunbar, L.L.P

Amicus counsel: Barbara L. Sloan, U.S. Equal Employment Opportunity Commission

Judges: Trial: James T. Trimble, U.S.D.J.; Appellate: Jones, Chief Judge, and Weiner and Graves, Circuit Judges

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