Employee Who Called Ethics Hotline Loses Retaliation Claim

A Walmart assistant manager who reported sexual harassment could not show retaliation when she was fired after confronting a suspected shoplifter, the 5th U.S. Circuit Court of Appeals ruled. According to Walmart, the confrontation violated its policy for addressing shoplifting concerns, supporting the plaintiff’s discharge.

The plaintiff worked as an assistant manager at Walmart Stores East LP. She was hired in 2014 as an assistant manager at the Walmart Neighborhood Market in Biloxi, Miss. She reported to the store manager who began working there in July 2016.

By June 2016, the plaintiff had received three coachings under Walmart’s disciplinary policy: one for absences and tardiness, and two for using derogatory language when referencing hourly associates. Any additional coaching before June 2017 would subject the plaintiff to termination.

In December 2016, the plaintiff began hearing rumors that the store manager paid another female employee to engage in sexual activity. Two other female employees, one of whom was also an assistant manager, told the plaintiff about the manager’s conduct, and one of the employees told the plaintiff that the manager also asked her to meet him in a hotel room.

The plaintiff reported these incidents to a project manager for associate relations. On March 28, 2017, the plaintiff also used Walmart’s ethics hotline to report that the manager was soliciting sexual favors from Walmart employees in exchange for money or employment-related perks. She provided details about the incidents and additionally alleged that the store manager had removed an “attendance occurrence” for the female employee he’d paid for sex, allegedly in exchange for sexual favors.

On April 4, 2017, the plaintiff used the Walmart ethics hotline to follow up on her initial report and report a new allegation of sexual harassment by the manager. Walmart investigated. The manager denied any wrongdoing and expressed frustration with the plaintiff, indicating that he knew she was behind the complaint.

In May 2017, the plaintiff was called to the front of the store to handle a possible shoplifting incident. A customer service representative told the plaintiff that a customer left the store with a grocery cart full of items, but the receipt from the self-checkout register reflected that the customer had paid for only six items. The representative had instructed a cashier to bring the customer back into the store. The plaintiff said it was not appropriate to follow the customer into the parking lot, but the customer had already been asked to return.

By the time the plaintiff came to the front of the store, the customer had returned and there was a large commotion. The plaintiff compared the receipt to the items in the customer’s bags and determined that the customer had paid for the items in her cart. The customer was angry and demanded to speak to another manager.

At the customer’s request, the store manager approached, reviewed the receipt and apologized to her. He escorted her outside and talked to her for a while. He reported the incident to a market manager, who concluded that the plaintiff initiated “a bad stop” and notified an asset protection manager, who recommended a fourth coaching of plaintiff that resulted in her discharge.

Shortly after the plaintiff was fired, Walmart determined that the plaintiff’s allegations against the store manager were unsubstantiated and closed the investigation. Walmart later terminated the store manager for gross sexual misconduct based on the report of another Walmart employee.

The plaintiff sued Walmart for retaliation and wrongful termination and sued another assistant manager for tortious interference. The defendants moved for summary judgment, which was granted by the district court, dismissing the plaintiff’s claims.

On appeal, the 5th Circuit determined that the plaintiff’s firing was soon enough after her reports of sexual harassment that she stated a potentially valid claim. However, the plaintiff could not show pretext in Walmart’s decision to fire her, which occurred at a higher level than the store manager against whom she had complained. The plaintiff could show that the decision-maker may have had his initial perception of the incident influenced by the manager, but the decision-maker then reviewed the evidence himself and recommended termination for the plaintiff.

As a result, the 5th Circuit upheld the district court’s dismissal of the claims.

Brown v. Wal-Mart Stores East LP, 5th Cir., No. 19-60719 (Aug. 14, 2020).

Professional Pointer: A supervisor accused of harassment or discrimination should not exercise ultimate disciplinary authority over a complaining employee while the complaint is being investigated. A higher-level manager should make any disciplinary decisions about the complaining employee.

Jeffrey Rhodes is an attorney with McInroy, Rigby & Rhodes LLP in Arlington, Va.

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