Rehiring with Back Pay Does Not Fix Discrimination

September 26, 2006 (PLANSPONSOR.com) - A federal appellate court has thrown out a lower court decision dismissing a sexual discrimination claim by a terminated Illinois hospital worker, determining her reinstatement with back pay did not bar the woman's lawsuit.

The 7 th US Circuit Court of Appeals issued a curt rejection of the notion that an employer faced with a workplace discrimination suit by a terminated worker can escape legal responsibility by giving the person his or her job back along with back pay.

“We decline to endorse a rule that would allow employers to escape liability by merely reinstating the aggrieved employee months after termination, whenever it becomes clear that the employee intends to pursue her claims in court,” wrote Circuit Judge Ann Claire Williams. “Such a rule could create an unintended economic incentive for employers to reinstate an employee who files a discrimination suit as means to avoid Title VII penalties whenever the costs of reinstating the employee are lower than the employer’s exposure in a Title VII suit.”

The appellate judges ruled that the lower court made a mistake by dismissing the lawsuit by Laura Phelan against the Buildings and Grounds Department of Cook County Hospital because she had raised enough potential sexual discrimination indicators that the matter should have gone to a jury. Williams asserted that the legal “record contains numerous gender-related comments from supervisors and co-workers. There is undisputed evidence that Phelan was physically assaulted by multiple employees, including one of her supervisors, and evidence that their motivations were gender-related.”

According to Williams’ ruling Phelan began work as a mechanical assistant in the Buildings and Grounds Department of  Cook County Hospital in 1999. During her employment, Phelan was subjected to abusive behavior by co-workers, including sexually offensive comments and pornographic pictures. At one point, Phelan was assaulted by two male co-workers.

After Phelan complained, her supervisors said she could either transfer to another job or agree to be fired. She chose a transfer, but the inappropriate behavior continued. She ultimately applied for a medical leave in August 2000. Although her request was denied, Phelan called in sick and missed work. On October 11, 2000, Phelan was fired because she had been absent.

On February 7, 2001, Phelan filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC) and, two days later,  Cook County reversed its termination decision and reinstated her with back pay. Phelan then filed a lawsuit.

The opinion for Phelan v. Cook County, 7th Cir., No. 01-C-3638 (September 18, 2006) is here

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