Michigan Supreme Court Clarifies Burden of Proof in Discrimination Cases

One year ago we reported on the Supreme Court's decision in Lytle v Malady. Plaintiff in this case had asserted, based on employee handbook statements and supervisory assurances, that she could only be terminated for just cause and, despite a bona fide reduction in force ("RIF") by the employer, that her discharge had been motivated by age and gender discrimination. The court in its previous decision had ruled that plaintiff had raised a genuine question regarding her status as a just-cause employee, but a RIF constitutes just cause, and that she had raised a genuine question as to whether her discharge was illegally motivated. The court agreed to reconsider its decision to clarify the level of proof a plaintiff is required to submit to survive an employer's motion to dismiss either a discrimination or breach of contract claim.

On the contract claim, the court determined that a handbook statement that employees could not be discharged "without proper cause," was "too vague and indefinite" to constitute an enforceable promise to discharge only for cause, particularly where the handbook stated that it was not intended to create a contract. Even if this statement could be construed as an enforceable promise, plaintiff could not show that it instilled in her a legitimate expectation of just-cause employment because of the handbook statement that it was not intended to create a contract and the dearth of other evidence to support plaintiff's assertion that the "policy" rose to the level of a promise of just-cause employment.

The oral supervisory assurances were similarly defective. They were neither clear nor unequivocal statements regarding duration of employment or grounds for termination.

On the discrimination claim, the court reiterated the approach announced in its initial decision that once a plaintiff establishes a prima facie case and defendant articulates a legitimate nondiscriminatory reason, plaintiff can survive a motion for dismissal by: 1) presenting evidence that the defendant's proffered reason is not believable only if such proof also raises a genuine issue that "discriminatory animus was a motivating factor underlying the employer's adverse action" or 2) presenting other direct or circumstantial evidence that discrimination was a motivating factor. On reconsideration, the court determined that plaintiff had not presented sufficient evidence of discrimination to survive the employer's motion to dismiss her age and sex discrimination claims.