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Indiana Supreme Court: Burden-Shifting Analysis In Discrimination Cases Modified
Posted in Litigation

In Filter Specialists, Inc. v. Brooks, the Indiana Supreme Court affirmed in part and reversed in part the trial court’s affirmation of the Michigan City Human Rights Commission’s finding that race motivated the discharge by Filter Specialists, Inc. of two African-American employees. 

In a matter of first impression, the Court addressed the impact the United States Supreme Court’s opinion in Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003), had on the traditional McDonnell Douglas test for a “single-motive” theory of discrimination.  The Indiana Supreme Court did not agree that Desert Palace overruled McDonnell Douglas.  Rather, it found the final stage of the McDonnell Douglas paradigm has been modified slightly by Desert Palace.  Now, for the plaintiff to prevail once the defendant has produced a legitimate, nondiscriminatory reason for its action, the “plaintiff must prove by a preponderance of the evidence either (1) that the defendant’s reason is not true, but is instead a pretext for discrimination . . . , or (2) that the defendant’s reason, while true, is only one of the reasons for its conduct, and another ‘motivating factor’ is the plaintiff’s protected characteristic.”  Either direct or circumstantial evidence can be used to make the latter showing.  If the plaintiff prevails on that second alternative, the burden shifts to the defendant for the opportunity to show it “would have taken the same action in the absence of the impermissible motivating factor.” 

In Filter Specialists, the Company claimed the two African-American employees were terminated for time-clock fraud because one of them improperly clocked in for the other.  Justice Rucker, writing for the Court, concluded, “There is no question that Company’s proffered reason was sufficient to justify terminating Employees. . . . And although no one testified to actually observing Employees engage in any such fraud, there was at least some basis in fact, albeit conflicting, that fraud may have occurred . . . . But the heart of the matter is whether the alleged time-clock fraud was the real reason actually motivating Company to discharge Employees.”  The Court observed that it gives “deference to the expertise of the agency and will not reverse simply because we may have reached a different result than the Commission.  Because we agree there was substantial evidence to support the Commission’s conclusion that Employees suffered unlawful employment discrimination, we conclude the trial court correctly affirmed the Commission’s decision.” 

The Indiana Supreme Court, however, reversed the trial court’s award of damages.  Damages are “determined by measuring the ‘difference between plaintiff’s actual earnings for the period and those which [s]he would have earned absent the discrimination of defendants.’”  “[T]he damages awarded to Employees should not have been affected by their receipt of unemployment compensation,” as incorrectly ordered by the trial court.

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