Wednesday, August 24, 2016

Ortiz v. Werner Enterprises: The Seventh Circuit's Muddled Attempt to Clarify Disparate Treatment Analysis

In an opinion by Judge Frank Easterbrook in Ortiz v. Werner Enterprises, Inc., No. 15-2574 (7th Cir. Aug. 19, 2016), the Seventh Circuit discarded the direct and indirect frameworks for analyzing claims of disparate treatment under federal EEO law. The court further clarified that there is no legal requirement that a plaintiff present a "convincing mosaic" of circumstantial and/or direct evidence in order to prevail:
The district court's effort to shoehorn all evidence into two "methods," and its insistence that either method be implemented by looking for a "convincing mosaic," detracted attention from the sole question that matters: Whether a reasonable juror could conclude that Ortiz would have kept his job if he had a different ethnicity, and everything else had remained the same.
Although it may be difficult to fault the Seventh Circuit for wanting to simplify and streamline the analysis of disparate treatment claims, I don't believe the court's effort is entirely successful. Good riddance to the "convincing mosaic" standard, but the court's rejection of the direct-indirect paradigm confuses me. For one thing, the Seventh Circuit failed to explain the relationship between its new unified approach and the burden-shifting frameworks established by the Supreme Court in McDonnell Douglas Corp. v. Green and Price Waterhouse v. Hopkins. Additionally, the Seventh Circuit neglected to address the different levels of causation that arise in EEO cases, but-for and motivating-factor causation.

In Ortiz, the court rejected the use of the direct and indirect methods of proof, yet it explicitly stated that it was not questioning the continued viability of McDonnell Douglas:
Today's decision does not concern McDonnell Douglas or any other burden-shifting framework . . . .
We are instead concerned about the proposition that evidence must be sorted into different piles, labeled "direct" and "indirect," that are evaluated differently. Instead, all evidence belongs in a single pile and must be evaluated as a whole. That conclusion is consistent with McDonnell Douglas and its successors.
I find it hard, nonetheless, to square the adoption of a unified analysis with McDonnell Douglas and Price Waterhouse.  The Supreme Court made it clear in Price Waterhouse that there is more than one way to skin a cat, and in the case of Ann Hopkins, the McDonnell Douglas framework did not suit the facts. Thus was born the Price Waterhouse framework. In some other cases, moreover, a plaintiff might be able to establish a violation using either the McDonnell Douglas framework or the Price Waterhouse framework, and there might be advantages of trying to establish a claim under one framework as opposed to the other. Therefore, it simply is not true that there is merely one way to establish causation, and trying to squeeze all claims into a single framework is contrary to established Supreme Court precedent.

Indeed, prior to the issuance of Ortiz, other recent Seventh Circuit decisions had included dicta criticizing not only the direct and indirect methods of proof but also the continued reliance on the McDonnell Douglas framework. For instance, in Smith v. Chicago Transit Authority, 806 F.3d 900 (7th Cir. 2015), the court treated the direct and indirect methods of proof as going hand in hand with the burden-shifting frameworks established by the Supreme Court in McDonnell Douglas and its progeny. Thus, the Smith court concluded that, in the absence of contrary guidance from the Supreme Court, it was bound to continue to analyze disparate treatment claims under the direct-indirect paradigm. If the Smith court concluded that it could not discard the direct-indirect paradigm without also discarding McDonnell Douglas, it is not clear why the Ortiz court disagreed. And notably, Judges Easterbrook and Hamilton were two of the three judges on the panels in both Smith and Ortiz.

The other major oversight I see in Ortiz is the Seventh Circuit’s failure to acknowledge that there are different kinds or levels of causation. If a plaintiff alleges discrimination based on race, color, sex, religion, or national origin, in violation of Title VII, then he has the burden of proving that his protected status was a motivating factor in the employer’s decision. If the plaintiff alleges discrimination on any other basis, however, including retaliation under Title VII, then he likely cannot prevail unless he establishes that his protected status was not merely a motivating factor in the employer's decision but that it was also a but-for factor in the employer’s decision.

In Ortiz, the court stated that the plaintiff was required to show that “he would have kept his job if he had a different ethnicity, and everything else had remained the same.” This is but-for causation. The plaintiff alleged a violation under 42 U.S.C. § 1981 and the Illinois Human Rights Act. If the plaintiff had alleged national origin discrimination under Title VII, then the plaintiff would only have been required to show motivating-factor causation. Was the court suggesting then that a different level of causation applies under section 1981 and the Illinois state law than under Title VII? That seems doubtful. More likely, the court just mistakenly assumed that causation is causation.

As I discussed in an earlier post, I think the McDonnell Douglas and Price Waterhouse frameworks roughly correspond to but-for causation and motivating-factor causation, respectively. Since Ortiz does not undermine the application of those frameworks, its failure to address the different kinds of causation may turn out to be of little consequence. Only time will tell.

This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.