Supreme Court Expands Availability of “Mixed Motive” Defense to Employers Sued for Discrimination

In Desert Palace, Inc. v. Costa, decided on June 9, 2003, the United States Supreme Court construed the “mixed motive” provisions of the 1991 Civil Rights Act in a way that expands the availability of an important affirmative defense to employers who are sued for discrimination. Although Desert Palace is largely a technical opinion on the burden of proof in employment discrimination cases, on balance it should prove to be good news for employers.

In most cases, Desert Palace will provide a substantial benefit to the employer, because it holds that if the plaintiff proves that a discriminatory intent was a motivating factor in an employment decision, the employer will be able to avoid liability for compensatory damages, punitive damages, or back pay by proving that the adverse employment decision at issue would have been made even in the absence of discrimination. However, in some cases, Desert Palace may provide a device for plaintiffs to create enough jury confusion to salvage an award of attorneys’ fees, if not damages.

To understand this decision, some history is necessary. Before Desert Palace was decided, the law in “mixed motive” cases was based on the Court’s 1989 decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In the garden-variety, “single-motive” case, the plaintiff bears the burden of proof at all stages, and may satisfy that burden generally in one of two ways: either by direct evidence of discrimination (e.g., proof that before choosing the younger candidate for promotion instead of the plaintiff, the decision maker was overheard to say, “I want someone young for this job”), or by circumstantial evidence (e.g., the successful candidate was 15 years younger than the plaintiff and had no experience, the plaintiff had consistently “excellent” evaluations, and the only evidence the employer offered for promoting the successful candidate instead of the plaintiff was that the hiring supervisor liked the younger candidate more than the older plaintiff).

In Hopkins, the combination of two opinions from a badly fractured Court resulted in a different set of rules applicable to “mixed motive” cases – that is, cases where there is evidence that the decision at issue was the result of at least two reasons, one of which was unlawful. Hopkins is a good example of what a “mixed motive” case is. It involved an accounting firm where admission to partnership was based on a decision made by a committee that considered comments from any partner in the firm who chose to submit them. The plaintiff was rejected after the committee considered comments from (a) some partners who favored her candidacy, (b) some who opposed her for non-discriminatory reasons, and (c) some who opposed her for discriminatory reasons (e.g., she was not sufficiently “feminine,” she used foul language more than a lady should). The lower appeals court held that since the plaintiff had proved that discrimination played a role in the decision to reject her, the employer could avoid liability only by proving by “clear and convincing evidence” that it would have rejected her candidacy even in the absence of the discriminatory remarks.

The Hopkins Court focused on the harshness of shifting the burden of proof from plaintiff to employer, and on how and when that should be appropriate. The Court ruled that by permitting the burden of proof to shift to the employer merely upon a plaintiff’s showing that discrimination had played some role in the decision, and then heightening the burden after it had shifted to the employer (from the usual “preponderance of the evidence” standard to the “clear and convincing” test), the lower court had changed the rules in a way that was unfair to employers. The Court resolved this unfairness by holding that the burden of proof should shift to the employer only when the plaintiff has submitted “direct and substantial” evidence that a discriminatory reason played at least some part in the employer’s decision. Upon such a showing, the employer will be liable unless it shows by a preponderance of the evidence (not by “clear and convincing” evidence) that it would have made the same decision even in the absence of discrimination.

Post-Hopkins cases focused on the type and amount of evidence that would be required to shift the burden to the employer. Plaintiffs with any direct evidence of discrimination whatsoever sought a burden-shifting jury charge, effectively creating a presumption of discrimination unless the employer could prove that the employment decision at issue would have been made even in the absence of discrimination. Otherwise, the case would be submitted to the jury as a “circumstantial evidence” case, in which there is a presumption that there was no discrimination unless the plaintiff can prove that the employer’s stated reason for the decision was a pretext masking an underlying discriminatory intent. The arguments tended to revolve around whether the quality, quantity, and nature of the plaintiff’s “direct evidence” warranted shifting the burden of proof.

In 1991, Congress enacted substantial amendments to Title VII that were intended to reverse several decisions that the Supreme Court had rendered in 1989, and to codify some of the Court’s prior decisions that the plaintiff’s bar was concerned that a conservative Court might change without intervention from the legislature. Hopkins fell into both categories. Although the reformers generally regarded the Hopkins burden-shifting rules as a good thing, the problem, in their view, was that under Hopkins an employer could avoid liability altogether by proving that even though there was discrimination, the same decision would have been made in the absence of a discriminatory intent. And so Title VII was amended to provide that where the plaintiff proves that a discriminatory intent was a motivating factor in an employment decision, and the employer demonstrates that it would have taken the same action in the absence of a discriminatory intent, the employer still will have to pay the plaintiff’s attorneys’ fees and costs of trial, even though it will not have to pay compensatory or punitive damages or back pay.

One issue that this amendment did not clarify, and which Desert Palace decided, was what happens to the “direct and substantial evidence” rule of Hopkins? Until 2002, every court of appeals that decided the issue had retained the Hopkins requirement of “direct and substantial evidence,” shifting the burden to the employer to prove that the same employment decision would have been made even in the absence of discrimination only in cases where a sufficient quantum of direct evidence was available. This meant the Hopkins rule was a pro-plaintiff device. Since the Hopkins jury charge remained available only where was direct evidence of discrimination, the employer would have opportunity to avoid damages only if the plaintiff’s evidence was so strong as to warrant the “mixed motive” charge (that is, only where there was already a presumption of discrimination).

Desert Palace changes this state of the law. Affirming the Ninth Circuit Court of Appeals, the Supreme Court examined the 1991 revision to Title VII that made available to employers what the Court referred to as the “affirmative defense” of avoiding most liability by showing that the same decision would have been even in the absence of the discriminatory motivation. The key to the Court’s analysis was the absence in the statute of any requirement of “direct and substantial” evidence before this “affirmative defense” is available. The Court held specifically that this defense is available not only in “direct evidence” cases, but also in “circumstantial evidence” cases.

Thus, from now on, the employer will be entitled to have the jury decide not only whether the plaintiff has proved that there was discrimination, but also, if the plaintiff has proved that there was discrimination, whether the employer has proved that it would have made the same decision even in the absence of discrimination. If the employer carries this burden, then its exposure will be limited to paying the plaintiff’s attorneys’ fees, even though the plaintiff has proved discrimination.

The popular press has lauded Desert Palace as a pro-plaintiff decision, probably because it appears to broaden the circumstances in which the burden of proof may be shifted to the employer. Under the Court’s decision, a burden-shifting “mixed motive” instruction may be appropriate not only where “direct” evidence of discrimination is present, but on the basis of “circumstantial” evidence as well – in other words, in all employment discrimination cases. When Desert Palace was first decided, however, those who regarded it as a pro-plaintiff decision probably tended to ignore the fact the Court stated emphatically that the burden of proof may be shifted to the employer only if the jury first finds that the plaintiff has proved discrimination, whether by direct or circumstantial evidence. Properly understood, the burden shift generally cannot help the plaintiff: it comes into play only where the plaintiff has proven his/her case in any event, and it gives the employer in such a case an opportunity to limit the plaintiff’s recovery to attorneys’ fees where, without the charge, the plaintiff would be entitled to other forms of relief (i.e., compensatory damages, punitive damages, and back pay).

To be sure, there will be cases in which the shifting of the burden of proof to the employer will confuse the jury, or invite juries to render compromise verdicts, with the result that employers will lose some cases they should have won. But in those cases, the employer will have to pay only the plaintiff’s attorney’s fees. There will be other cases – especially close cases – in which the employer would have lost anyway on the question of whether there was discrimination, but avoids liability by proving that it would have made the same decision in the absence of the discriminatory factors. On balance, although it is impossible to say for sure, there probably will be more of the latter cases than the former. Certainly the extent to which Desert Palace has been postured as a pro-plaintiff decision has been greatly exaggerated.