Even in the face of an undisputed national workforce reduction, in a recent decision (Cutcher v. Kmart), the Sixth Circuit found an issue of disputed fact existed as to whether Kmart’s termination of an hourly associate as part of a reduction in force interfered with and was in retaliation for that associate’s recent exercise of her FMLA rights.
Cutcher had been employed by Kmart for about 20 years. In the four years she had been evaluated by her then current supervisor, Cutcher had received either the highest or second-highest rating in Kmart’s appraisal system. While her supervisor did comment in certain appraisals that Cutcher had some challenges in the area of teamwork, the supervisor never documented Cutcher for any such episode and still rated her as a high performer.
Within weeks after her last appraisal, Cutcher began a six-week FMLA-approved leave for which she was paid under Kmart’s short-term disability leave policy. Then, just weeks later, Kmart announced a nationwide RIF which included the termination of six associates at the store where Cutcher worked. As part of the nationwide RIF process, the store was instructed to evaluate each associate’s performance based on the same core areas that were evaluated in the annual performance appraisals. The store then averaged the employee’s RIF appraisal score with their most recent performance appraisal score to arrive at the overall score that determined those associates to be terminated. One caveat in the scoring form was that the store had to comment on a significant change in the RIF appraisal score from that in the associate’s most recent performance appraisal.
Cutcher’s RIF appraisal score was much lower than her most recent performance appraisal, made just one month earlier. As required, the store explained the difference by stating only poor customer and associate relations and “LOA.” Kmart denied that the leave notation formed the basis for Cutcher’s decreased RIF appraisal, but that LOA signified only that her termination had to be delayed until her return from leave, as mandated by Kmart’s national guidelines. Had Cutcher’s rating during the RIF been identical to her appraisal just weeks earlier, she would not have been selected for termination.
In reversing the district court’s summary judgment ruling in favor of Kmart, The Sixth Circuit held that a disputed issue of material fact remained as to whether Kmart interfered with Cutcher’s FMLA rights and retaliated against her because she took the leave. That is, the Court explained that a reasonable fact finder could conclude that the termination was based on her leave because of the brief time between her annual appraisal and the lower RIF appraisal. Also significant was that Kmart had not documented any of the performance issues that it claimed supported the lower RIF appraisal. In fact, Cutcher had never been disciplined and her evaluators admitted they knew of no change in her performance during the minimal period between the annual and RIF appraisals. Moreover, the Court found that a jury could reject Kmart’s explanation that the change between appraisal resulted from the fact that Cutcher’s supervisor tended to rate associates higher than deserved to avoid confrontation. Lastly, the Court pointed to Kmart’s LOA notation on the RIF form as evidence that could support a finding in Cutcher’s favor.
So, what lessons can we take from Cutcher v. Kmart? Whether in times of a RIF or simply standard business operations, attention must be paid to how managers evaluate their employees. It will always be the case that certain managers rate high or low as a practice, so if you can’t train the manager to rate in a more realistic manner, then at least document that particular manager’s practice. This will avoid the post-hoc allegation Kmart confronted and also lay the groundwork for later explaining potential differences in appraisals made by others. Furthermore, a termination analysis must be meticulously conducted and documented. Standing alone, a LOA notation on the section of a RIF form identifying the reason for a termination decision begs a court to deny summary judgment.
Thus, as with any termination decision, attention to important details and careful documentation can protect the employer from an adverse decision like that in Cutcher v. Kmart.