Pink Slip Protection: Former Employees Have Employment Rights Too

Last week the U.S. 4th Circuit ruled that a former employee may enjoy legal protection under Title VII of the Civil Rights Act. The court ruled in favor of a former Virginia county employee who alleged she was offered a less favorable severance package because she is a woman. Gerner v. Cnty. of Chesterfield, Va., 765 F.Supp.2d 770.

The district court had found that the employee had “failed to allege a Title VII claim because the County’s assertedly discriminatory denial of severance benefits did not constitute an adverse employment action,” which is one of the four factors necessary to establish a prima facie case of gender discrimination.  A plaintiff must also prove that she is a member of a protected class; that she had satisfactory job performance; and that similarly situated employees outside the protected class received more favorable treatment. White v. BFI Waste Servs., LLC, 375 F.3d 288, 295 (4th Cir. 2004).

The district court determined that the county’s offer did not constitute an adverse employment action under the theory that (1) severance benefits were not a "contractual entitlement" and (2) the severance package was not offered until after her employment was terminated. The 4th Circuit reversed.

In its opinion, the 4th Circuit stated that the first of two reasons for the reversal is that the Supreme Court previously established that any “benefit that is part and parcel of the employment relationship may not be doled out in a discriminatory fashion, even if the employer would be free under the employment contract simply not to provide the benefit at all." Hishon v. King & Spalding, 467 U.S. 69 (1984). 

In stating its second reason for reversing the matter, the 4th Circuit pointed to the plain language of Title VII stating that it protects both current and former employees from discriminatory adverse employment actions, as well as those who may have been wrongfully denied employment. (Additionally, the 4th Circuit found that the plaintiff had in fact pled factual allegations that could establish the adverse action occurred prior to termination.) The matter was remanded to the district court on two additional arguments that were newly raised by the county.

As always, it is not whether you are generous to your employees but whether you treat them equally that matters.  The 4th Circuit opinion makes clear that this can extend to your former employees as well.  For this reason, when making termination decisions, it is crucial to review your previous severance decisions. 


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