Dive Brief:
- The 9th U.S. Circuit Court of Appeals partially reversed a lower court’s summary judgment grant to Clorox in a former sales employee’s discrimination suit, holding Friday that the plaintiff raised genuine issues of material fact as to whether he was wrongfully terminated because of his gender.
- Clorox fired the plaintiff in Toney v. The Clorox Co., a 63-year-old White man, amid a reorganization of its sales staff and promoted a 35-year-old White woman to replace him, according to court documents. He alleged discrimination on the basis of race, sex and age, but the U.S. District Court for the Western District of Washington granted summary judgment to Clorox, holding that the plaintiff failed to show pretext for discrimination.
- The 9th Circuit reversed only on the basis that the plaintiff had shown that a reasonable jury could conclude that Clorox’s reasons for firing the plaintiff were internally inconsistent and discriminatory on the basis of gender. The court said that a Clorox program to achieve gender “representation targets” was sufficient evidence to defeat the company’s motion for summary judgment.
Dive Insight:
The 9th Circuit’s decision may serve as a cautionary one for employers as they decide how to frame diversity, equity and inclusion initiatives in the current business climate. The court specifically referenced Clorox’s IGNITE strategy, a component of which calls on the company to achieve “parity across total company, women, people of color” in addition to ensuring pay equity.
In his opening brief to the 9th Circuit, the plaintiff alleged that Clorox measured “parity” using percentages, citing a 2021 annual report. The plaintiff also cited a Clorox press release announcing the company’s inclusion in the 2021 Bloomberg Gender-Equality Index. In the release, Clorox CEO Linda Rendle was quoted as saying that she was “proud that women leaders make up 50% of Clorox’s executive team since it’s important we represent the diverse consumers we serve around the world, the majority of whom are women."
The plaintiff argued that a jury could find that Clorox “overreached” with its DEI policies, “crossing the line from permissible value statements to goals and preferences that drove hiring and firing decisions.”
Clorox claimed that managerial concerns about the plaintiff’s employment competencies, combined with the reorganization of its sales staff, were the nondiscriminatory reasons for his termination. Per the 9th Circuit, the company specifically cited the plaintiff’s issues with strategic leadership and reports that “he could be difficult to work with.” The plaintiff countered that he received positive annual evaluations and that little pretermination evidence suggested that Clorox had concerns about his performance.
Ultimately, the 9th Circuit said Clorox’s goal of increasing the number of women managers was “sufficiently ‘specific and substantial’” to defeat summary judgment and “raises material questions of fact concerning Clorox’s reasons for firing him.”
The case is one of several recent decisions involving claims of discrimination by a majority-group plaintiff. A lawsuit brought by a male former Accenture employee earlier this month similarly claimed that the company promoted female workers over the plaintiff in pursuit of a gender parity goal.
The 9th Circuit’s focus on specific forms of DEI goals — namely, the use of the word “parity” and the effort to increase the number of women managers at Clorox — illustrates the legal risks such goals may create for employers. A recent Bloomberg Law analysis found that the highest-risk DEI programs involved instances in which job opportunities were reserved exclusively for candidates of a particular race, sex or other protected characteristic.
Meanwhile, the U.S. Equal Employment Opportunity Commission, which has increasingly taken an anti-DEI stance in its enforcement and guidance, published documents in March categorizing the use of quotas or the balancing of workforces based on protected characteristics as illegal under federal civil rights laws. Weeks later, a former EEOC commissioner discouraged the use of policies that ask hiring managers to meet quotas or arbitrarily set hiring goals.
