On May 13, 2022, the U.S. Court of Appeals for the Fifth Circuit affirmed summary judgment in favor of an employer, finding that a fired employee had failed to create a genuine dispute of material fact as to pretext. In Owens v. Circassia Pharmaceuticals, Inc., the court affirmed summary judgment despite its recognition that the former employee had presented “substantial evidence” that could lead a reasonable jury to conclude that the employer’s stated reason for termination—her poor job performance—was false. Critically lacking was evidence that the employer “was motivated in any way by discrimination or retaliation.”

Background

Grace Owens worked for Circassia Pharmaceuticals, Inc., from 2010 to 2018, at which time her employer discharged her for poor performance—just three days shy of the expiration of her performance improvement plan (PIP). Owens advanced a myriad of claims in her lawsuit against Circassia, but, following the district court’s grant of summary judgment, her only claims at issue on appeal were those of race, national origin, and gender discrimination and retaliation.

Owens, who is Asian, was replaced by a worker who is a Caucasian male, so the focus of the dispute, both before the district court and on appeal, was that of pretext, the “crux of this appeal.” On appeal, Owens challenged Circassia’s explanation for the termination of her employment as “unworthy of credence.” Owens presented six different categories of evidence in an effort to raise a material fact issue as to pretext, including: (1) alleged disparate treatment, (2) an inadequate investigation of Owens’s internal complaints and of the alleged performance deficiencies motivating the termination of her employment, (3) Circassia’s alleged inconsistent and illogical reasons given for Owens’ discharge, (4) Circassia’s use of subjective criteria to evaluate Owens’s performance, (5) Circassia’s discharge of Owens on the fifty-seventh day of the sixty-day PIP, and (6) Circassia’s offering of a severance agreement to Owens during the period of the PIP.

The Fifth Circuit’s Ruling

In evaluating these issues on appeal, the Fifth Circuit noted that Owens’s strongest argument was that related to “illogical” and “inconsistent” reasons being given for her discharge. Specifically, Owens had presented “substantial evidence” by way of declarations from her former subordinates that contradicted at least three of the underlying reasons for placing her on a PIP and eventually terminating her employment. “[A] reasonable trier of fact could find that Circassia’s proffered justification for terminating Owens is false. But that alone is not enough.” Instead, to avoid summary judgment, Owens was required to “produce sufficient evidence of implausibility to permit an inference of discrimination, not merely an inference that Circassia’s proffered reason is false.” (Emphasis in original.) In affirming the lower court’s summary judgment for Circassia, the Fifth Circuit stated:

There is a gray area between firing an employee for obvious performance deficiencies and firing an employee for discriminatory reasons. But under Title VII [of the Civil Rights Act of 1964] and 42 U.S.C. § 1981, discrimination is what matters. Even when an employee presents evidence that would allow a jury to conclude that an employer’s proffered justification for an adverse action is false, that does not necessarily permit a rational inference that the real reason was discrimination.

Key Takeaways

The court’s decision in Owens represents a strong reinforcement of the Fifth Circuit’s long-standing view that “[e]mployers are ‘entitled to be unreasonable’ in terminating their employees ‘so long as [they] do[] not act with discriminatory animus.’” (Brackets in original.)

Another notable aspect of the Owens opinion was the court’s analysis of Owens’s claim that Circassia conducted an insufficient investigation of her internal complaints and of the performance issues underlying her PIP and ultimate discharge. In this regard, the Fifth Circuit noted that even if Circassia “could have interviewed more or different people, the mere fact that Circassia did not conduct [its] investigations as Owens might have preferred is not sufficient to show that the investigations were inadequate,” let alone discriminatory.