A recent case out of Michigan highlights the importance of equal treatment in the workplace and the risks that disparate treatment claims pose for employers who fail to provide equal application of policies.

In Walker v. Ascension Genesys Hospital – Michigan, 2:23-cv-10198, (E.D. Mich.) (January 25, 2023), a female second-year medical resident who was attending a post-graduate OB/GYN program was awarded over $10 million after she was terminated from the program during her maternity leave.

The hospital maintained that the termination was based on Walker’s failure to pass a required licensing exam after two attempts. When the court reviewed the facts of the case, though, the decision to terminate was not as straightforward as the employer had claimed.

What Happened in Walker v. Ascension Genesys Hospital?

Nicole Walker was admitted to Ascension Genesys Hospital’s OB/GYN residency program in July 2019. The terms of the residency program required her to sit for a licensing examination by the sixth month of the second year in the program.

That deadline meant Walker needed to complete the exam by December 2020. As anyone alive in 2020 knows, the restrictions that were in place during the COVID pandemic presented certain limitations that made it difficult for Walker to study and take her examination. As a result, she failed to pass her initial examination.

Walker requested additional time to study and retake the examination. The hospital granted an extension through January 2021 and advised her that she was expected to pass the licensing exam by that deadline. At the time the hospital gave this extension, the hospital had knowledge that Walker was pregnant and would be out on maternity leave at the time she was expected to retake the examination. Both prior to and during maternity leave, she requested an extension that would allow her to retake the exam after her maternity leave ended, but the hospital denied those requests.

Walker took the examination for a second time in January 2021 and again failed. The hospital terminated her from the residency program in April 2021.

She took the exam a third time in June 2021 and passed with a score of 536, well above the minimum passing score of 350. She reapplied to the residency program; however, the hospital refused to reinstate her.

After being denied readmittance to the program, Walker sued the hospital and the residency program for wrongful termination and employment discrimination. In her lawsuit, she alleged disparate treatment based on her pregnancy under Michigan’s Civil Rights laws. Walker claimed that she was treated differently from other individuals in the residency program who also failed the licensing examination. She alleged that she was not offered probation, remediation, or other assistance that had been made available to other non-pregnant resident program participants in the past.

The case went to trial, and the jury found in favor of Walker and awarded her $10.03 million.

Understanding Disparate Treatment Discrimination

Title VII of the Civil Rights Act prohibits illegal employment discrimination based on protected classes or characteristics. In disparate treatment cases, an employee claims that the employer engaged in intentional discrimination based on a protected characteristic such as race, sex (including pregnancy), national origin, or sexual orientation.

To establish disparate treatment, an employee typically must show that they are a member of a protected class, were qualified for the position, suffered an adverse employment action, and were treated less favorably than similarly situated employees outside the protected group. If they can do that, then the employer has the burden of proof to show a legitimate, nondiscriminatory reason for the action.

Disparate treatment is different than disparate impact. Disparate treatment involves intentional discrimination, while disparate impact refers to a seemingly neutral employment policy that disproportionately affects a protected group.

Key Takeaways for Nevada Employers

This case highlights a number of important lessons for employers.

Lesson 1: Treat Similarly Situated Employees Similarly

Employers must always treat all similarly situated employees equally and similarly. Exceptions being made for certain employees, whether they be positive or negative, are where employers get themselves in trouble most often.

Employers often let emotions and frustrations get involved and believe that poor-performing or difficult employees are not entitled to the same treatment as their high-achieving and productive employees. However, if a claim is filed against the company, the burden is going to fall on the employer to provide objective and legitimate business reasons for why they treated an employee differently from other similarly situated employees in the workplace.

Lesson 2: Inappropriate Remarks Can Undermine a Defense

Employers, along with their managers, supervisors, leadership, and other representatives of the employer, need to understand that they should refrain from sharing their frustrations with employees through negative remarks and inappropriate comments. This case specifically highlights this issue.

During the trial, it was shown that a doctor at the hospital had commented to Walker that being a mother would interfere with her ability to become a doctor and encouraged her to take a different path than the one she was on. This comment clearly hurt the hospital’s defense and painted the hospital in an unfavorable light to the jury.

Even if an employer makes a decision based on legitimate business reasons, comments that are thoughtless and done out of frustration can lead a jury to question an employer’s motives and make it more difficult for an employer to defend against a claim filed against them.

Lesson 3: Revisit Decisions When New Information Emerges

Employers should be willing to revisit employment decisions when new information comes to light.

As stated earlier, the hospital refused to reinstate Walker in the residency program even though she scored highly on her licensing exam. It was shown during the trial that some of the reasons why were that the hospital believed their residency program was highly regarded, and they would have little issue replacing Walker with another highly performing individual.

Employers can avoid long, drawn-out, and expensive legal battles by being willing to reconsider certain employment decisions when looking at the entire facts and circumstances and giving employees another chance.

Lesson 4: Fairness and Respect Still Matter

Employers should always remember that no matter how difficult or low-performing an employee may be, an employer must always treat employees with fairness and respect. An employer is never going to go wrong if they treat all employees in the manner that they would want to be treated. Frustration and antipathy should never be allowed to be a part of an employer’s interactions with their employees.

In Conclusion

The outcome in Walker v. Ascension Genesys Hospital – Michigan serves as an important reminder that employment decisions are judged not only by the reason given but also by how consistently and fairly those decisions are made. This case highlights the importance of reviewing policies and practices to ensure they are being applied consistently across the workforce. Even when an employer believes it has a legitimate business reason for an employment action, inconsistent treatment or comments suggesting bias can significantly weaken that defense.

The best way for employers to reduce the risk of discrimination claims is to maintain clear company policies, apply them consistently, and document legitimate business reasons for all employment decisions.

By: Cara Sheehan, Esq.

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