Reference no: EM132232750

Rachells v. Cingular Wireless Employee Services

As an Indirect Channel National Retail Account Executive in Cingular Wireless’s Cleveland region, Anthony Rachells received numerous sales awards, consistently exceeded company sales goals by the greatest margin of any of his co-workers, and, in 2003, earned the top performance review among his Cingular peers. In 2004, Cingular acquired AT&T and conducted a reduction in force, in which it selected just four of nine existing Cingular and AT&T employees in Rachells’ position to remain with the company. Although Rachells exceeded his 2004 sales goals by a greater margin than in 2003, Rachells received the lowest 2004 performance review score of any candidate and was ranked seventh out of nine in the overall selection process. In February 2005, Rachells was notified that he would be terminated effec- tive April 15, 2005. Rachells, who is African-American, sued for racial discrimination arising out of his dis- charge. The district court granted summary judgment to Cingular on all claims, and Rachells now appeals. For the following reasons, we REVERSE, and REMAND the case for further proceedings consistent with this opinion.

Around October 2004, Cingular acquired AT&T Wireless Services, Inc. (“AT&T”). Subsequently, in ap- proximately December 2004, Cingular’s senior leader- ship directed its management teams to realign their workforce in light of the recent acquisition.

This realignment process led to the elimination of numer- ous jobs within Cingular, affecting workers across the country (the “reduction in force” or “RIF”). . . . David Fine [was directed] to review the productivity of the Cingular and AT&T Indirect Channel Account teams. * * * After conducting his analysis, Fine determined that it was only necessary to retain four of the nine National Retail Account Executives currently employed between the two companies.

To identify the most qualified employees for reten- tion by Cingular, Keith Hart was charged with evaluat- ing all nine candidates and ranking them in order (the “RIF selection process”). He purportedly utilized the Staffing Integration Guidelines for Human Resources and Managers as a guide to evaluate and rate each can- didate. Hart’s formal evaluation of each candidate in- cluded two components. The first component was the employee’s 2004 performance evaluation score.

The second component used to rate each candidate was derived from scores Hart assigned to questions answered by the candidates during one-on-one inter- views with Hart in mid-January 2005 (the “RIF inter- view score”). The interview questions were selected from a Staffing Integration Selection Guide (“SISG”) given to Hart, which Defendants allege were similar to the guidelines dispersed throughout the company nationally. Hart rated each employee in the following categories: 1) Create Customer Loyalty; 2) Drive For Results; and 3) Use Sound Judgment. For each category, the employee was assigned a score between “5” rep- resenting that the candidate “consistently exceed[ed] performance objectives/behavioral expectations,” and “1” indicating that the candidate “d[id] not meet basic performance objectives/behavioral expectations.” After rating each candidate under this two-part rubric, Hart submitted his findings to Fine for approval.

In his 2004 annual review, Hart assigned Rachells an overall score of 2.6 for his performance during the year. This was the lowest 2004 performance score re- ceived by any of the nine candidates. Hart indicated that Rachells, [among other things], showed up late for meetings, worked on fantasy football during a “boot camp” training session in August 2004, and failed to contribute in staff meetings. Rachells denies these allegations, and avers that his 2004 performance evaluation was “bogus,” subjective, and racially motivated.

With regard to Rachells’ RIF interview, Rachells contends that he was the first of the Cingular candi- dates to be interviewed, and was never informed of what the interview process would entail. Cingular as- serts that Rachells was aware that the interview would be used to determine whether he would remain with Cingular. Cingular also highlights that, of the Cingu- lar candidates, Rachells was the only person who did not prepare a presentation for the RIF interview. None of the AT&T candidates, however, prepared presenta- tions. Hart assigned Rachells a score of 2 out of 5 in the areas of “Create Customer Loyalty” and “Drive For Results,” and 3 out of 5 in the area of “Use Sound Judg- ment.” Rachells contends that these scores reflect Hart’s racial bias. In particular, he points out that Cingular’s copy of the SISG from Rachells’ interview does not, on its face, reflect that Rachells was interviewed in the area of “Drive For Results.” Rachells avers that this reflects the fact that Hart interviewed him twice in the area of “Create Customer Loyalty.” Rachells agrees that Hart asked him questions consistent with those appearing in his SISG, with respect to the two areas in which he was interviewed. All eight remaining candidates were inter- viewed in all three areas, as reflected in their SISGs.

Rachells’ combined score in the RIF selection pro- cess ranked him seventh among the nine candidates. Rachells’ Cingular peers, all Caucasian, received the highest three scores and were selected to remain with Cingular. An AT&T candidate, Joseph Espiritu, a His- panic male, ranked fourth among the nine candidates and was selected as the fourth and final National Retail Account Executive to remain with Cingular.

The five employees not selected included two Caucasian females, one Caucasian male, one Hispanic male and Rachells.

Rachells has alleged that, in terminating him in the reduction in force, Cingular unlawfully discrimi- nated on the basis of race.

Generally, to establish a prima facie case of discrimination, a plaintiff must show that he or she was: (1) a member of a protected class; (2) discharged; (3) qualified for the position; and (4) that a “similarly situated” non-protected person was treated better. Where, as here, a discrimination claim is based on termination arising out of a work force re- duction, “this court has modified the fourth element to require the plaintiff to provide ‘additional direct, cir- cumstantial, or statistical evidence tending to indicate that the employer singled out the plaintiff for discharge for impermissible reasons.’ ” Cingular does not dispute that Rachells satisfies the first three prima facie ele- ments, but argues that Rachells failed to present addi- tional evidence to show that Rachells was “singled out” for impermissible reasons.

Here, among the Cingular candidates, Rachells was the only person of color and the only individual discharged in the RIF. Given this small sample size of the Cingular candidates, however, this is not sufficient to conclude that Cingular’s actions were racially mo- tivated. Rachells also presented evidence that he was not informed about what the RIF interview would en- tail and was not interviewed regarding the “Drive For Results” component of the SISG. A reasonable fact- finder could give weight to this evidence and infer that Rachells was not given the same opportunity to prepare and/or to make his case as the other candidates.

While, alone, evidence of aberrations in Rachells’ in- terview might be insufficient to raise a genuine factual dispute as to the fourth prima facie element, the district court erred in dismissing two other crucial categories of evidence tending to show race-based discrimination: evidence of Rachells’ superior qualifications and evi- dence of a discriminatory atmosphere at Cingular. When viewed in the aggregate, and in the light most fa- vorable to Rachells, this evidence establishes a genuine question of material fact as to whether Cingular singled out Rachells for discharge because of his race.

As evidence of his relative qualifications, Rachells points to the nine awards and/or accolades he received between 1999 and 2003. Rachells also pres- ents evidence that his 2002, 2003, and 2004 attainment percentages exceeded those of his Cingular peers, and that his 2003 performance review was the highest of any of his co-workers. Cingular does not dispute the evidence of Rachells’ superlative performance between 1999 and 2003, but argues that Rachells’ performance declined markedly in 2004. As evidence of this de- cline, Cingular offers Rachells’ poor 2004 performance review and his poor RIF interview score, and his RIF ranking as seventh of nine candidates. In addition, Cingular contends that Rachells’ 2004 compensation evidence is irrelevant because candidates’ sales attain- ment percentages were not among the factors consid- ered in the RIF selection process.

In evaluating the above evidence, the district court correctly determined that the relevant inquiry is Rachells’ qualification relative to other candidates at the time of the RIF. Nevertheless, the district court erred in concluding, as a matter of law, that evidence of Rachells’ past performance “do[es] not undercut Defendants’ statements regarding his performance in 2004.” When viewed in the light most favorable to Rachells, evidence of Rachells’ many accolades and awards, as well as the fact that he had the best 2003 per- formance review and the highest 2002, 2003, and 2004 attainment percentages of any of his Cingular peers, could lead a reasonable jury to conclude that Rachells was consistently Cingular’s highest-performing em- ployee and remained so in 2004. Cingular’s attempts to dismiss Rachells’ superior 2004 attainment percentages as legally irrelevant are unconvincing: it strains credu- lity to imagine that the qualifications for a sales posi- tion—which, by Cingular’s own formulation include “creat[ing] customer loyalty” and “drive for results”— are unrelated to demonstrated sales ability. Accord- ingly, a factfinder could infer that Rachells’ poor scores in the RIF selection process did not reflect an actual decline in performance, but rather the reviewer’s at- tempt to ensure Rachells was among those discharged in the workforce reduction. The record therefore re- flects a genuine dispute of material fact as to whether

Rachells possessed qualifications superior to those of a non-protected candidate who was not discharged.

The record also contains other evidence probative of whether Rachells was singled out for discharge on the basis of race.

In presenting evidence of Fine’s decision to promote [to District Manager] Bagshaw [a white male] over more qualified minority applicants, Fine’s failure to investigate complaints of discriminatory performance evaluations, and other conduct by Bag- shaw contributing to a discriminatory atmosphere, as well as evidence that Rachells had superior qualifica- tions to other Cingular candidates retained in the RIF, Rachells has provided “additional evidence” that he was terminated on account of his race, as required by the heightened standard for workforce reduction cases. Accordingly, . . . Rachells has established a prima facie case of race discrimination.

Once a plaintiff has established a prima facie case, under the McDonnell Douglas framework, the burden shifts to the employer to offer a nondiscrimi- natory reason for the plaintiff’s discharge. Here, there is no question that Cingular has offered such a reason: the RIF and Rachells’ poor performance in the RIF selection process. The burden therefore shifts back to Rachells to “point out ‘evidence from which a jury could reasonably reject [Cingular’s] explanation’ ” as pretextual.

The relative qualifications of candidates can estab- lish triable issues of fact as to pretext where “the evi- dence shows that either (1) the plaintiff was a plainly superior candidate, such that no reasonable employer would have chosen the latter applicant over the former, or (2) plaintiff was as qualified as if not better qualified than the successful applicant, and the record contains ‘other probative evidence of discrimination.’ ”Accord- ingly, the above-described evidence of Rachells’ supe- rior qualifications and the discriminatory atmosphere at Cingular doubles as evidence from which a jury could find pretext.

With respect to qualifications evidence, the record contains evidence that Rachells received numerous

sales accolades and awards between 1999 and 2003, had the best 2003 performance review of any of the Cingular candidates, and had the highest 2002, 2003, and 2004 attainment percentages of any of his Cingu- lar peers. By Cingular’s own formulation, the qualifi- cations for the National Account Executive position were measurable by the metrics included in Cingular’s annual performance reviews (which rated candidates in the areas of “Drives For Results,” “Drives For Strat- egy,” and “Maximizes Talent”) and the SISG factors (which included “Create Customer Loyalty,” “Drive For Results,” and “Use Sound Judgment”). Given Rachells’ earlier top performance on Cingular’s annual review metrics, and the evidence that Rachells’ annu- alized sales attainment percentage actually increased from 2003 to 2004, a reasonable jury could conclude that Hart gave Rachells an undeservedly poor review to create pretext for his discharge. A factfinder could further conclude that, in 2004, Rachells was as quali- fied, if not more qualified, than his fellow applicants with respect to the annual review metrics. Moreover, given the inherent correlations between the SISG fac- tors and demonstrated sales ability, a reasonable fact- finder could likewise conclude that Rachells was as qualified, if not more qualified, with respect to the metrics ostensibly measured in the RIF interview. The record, therefore, reflects a genuine dispute of mate- rial fact as to Rachells’ qualifications relative to those of other candidates. 

1. What was the legal issue in this case? What did the appeals court decide?

2. What performance appraisal process was used to select employees to retain in the RIF? What were the outcomes of that process for the plaintiff?

3. What other evidence existed regarding the plaintiff’s job performance? Why does the court not simply defer to the employer’s own rating of the plaintiff ’s job performance in this case?

4. Do you agree with the decision in this case? Why or why not?