Emanuel v. Gap, Inc.

Background

Desa Emanuel and Lacrena Taylor, both identified in the opinion as African American women, sued Gap, Inc., Banana Republic, LLC, Michelle Russo, Gregoire Jean-Louis, and Toni Lynn Borowski. They asserted race-discrimination and retaliation claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, and the New York State Human Rights Law. They also asserted aiding-and-abetting claims under the New York law. The plaintiffs withdrew their defamation claim.

Emanuel was a General Manager at Banana Republic’s Vernon Hills Store, and Taylor was a manager who later became General Manager of the Westchester Store. The company’s written timekeeping policy prohibited modifying time records or failing to report hours worked and stated that willful violations could lead to termination. The plaintiffs testified that they understood an unofficial “three-minute grace period” allowed certain timecard changes. The opinion states that at least two other managers also believed such a grace period existed.

After the Westchester Store failed a compliance audit, a second audit led to a review of timecard modifications. The company found that Taylor had made numerous edits that removed employee time. It later found that Emanuel had made edits removing time from employees’ records. Taylor and Emanuel were terminated in March 2018. Another manager, Melissa Kolibabek, was investigated for making similar edits but was coached and retrained rather than terminated.

Summary-judgment standard

Summary judgment is appropriate only when the evidence shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. At this stage, the court does not decide which witnesses are truthful or resolve disputed facts. It must view the evidence and reasonable inferences in favor of the party opposing the motion.

Race-discrimination claims

The court applied the burden-shifting framework used for employment-discrimination claims. The defendants did not dispute that the plaintiffs met the first three parts of the initial showing required for race discrimination: membership in a protected class, satisfactory job performance, and an adverse employment action. The defendants argued that the plaintiffs could not show circumstances suggesting racial discrimination.

The court held that the plaintiffs met this initial, minimal burden. It found that a reasonable jury could determine that the plaintiffs and Kolibabek were similarly situated because they were managers subject to the same timekeeping policy and engaged in comparable conduct by modifying employee timecards. The court recognized differences in the number of edits and the amount of time removed, but held that the seriousness of the conduct was a factual issue for a jury. Because Kolibabek was not terminated while the plaintiffs were, the court found a possible basis for an inference of discrimination.

The court also held that the defendants had offered a legitimate, nondiscriminatory reason for the terminations: the plaintiffs’ violations of the company’s timekeeping policy. The court did not decide whether the plaintiffs’ understanding of the unofficial three-minute rule was correct. It concluded that the defendants’ belief that the conduct was terminable was a legitimate reason at that stage of the analysis.

At the pretext stage, the court found that the evidence about Kolibabek’s different treatment could allow a jury to conclude that the stated reason was not the real reason and that race played a role. The court further noted conflicting evidence about whether Russo’s conduct toward Taylor was racially derogatory. It held that credibility determinations belonged to a jury and denied summary judgment on the discrimination claims under Title VII, § 1981, and the New York State Human Rights Law.

Retaliation claims

The plaintiffs claimed that their terminations were retaliation for complaints about Russo’s allegedly racist comments and conduct at a company conference. The court found that the close timing between the complaints and the terminations, by itself, did not establish causation because the discovery of the plaintiffs’ timecard misconduct was an intervening event. But the court held that the alleged disparate treatment of Kolibabek could provide indirect evidence of causation.

For the Title VII retaliation claim, the court also considered a “cat’s paw” theory. Under that theory, an employer may be liable when a biased employee influences a decision-maker and the employer negligently allows that influence to affect the adverse employment action. The court found evidence from which a jury could conclude that Russo had retaliatory or discriminatory animus and affected the investigations or termination decisions. The record showed that Russo participated in communications and disposition discussions, was present during interviews, and personally informed the plaintiffs of their terminations, even though she was not formally assigned to the investigation team.

The court held that factual disputes remained about what information or recommendations Russo provided, how she affected the interviews, and how much judgment she exercised in the termination decisions. It also found that the plaintiffs could rely on Kolibabek’s different treatment to challenge the defendants’ stated reason for the terminations. The court therefore denied summary judgment on the Title VII, § 1981, and New York State Human Rights Law retaliation claims.

Aiding-and-abetting claims

The plaintiffs asserted that Russo, Borowski, and Jean-Louis aided and abetted the alleged discrimination and retaliation under New York law. The court explained that such a claim requires an individual defendant to have actually participated in the alleged discriminatory conduct.

The court found that Jean-Louis was involved in the investigation and made recommendations based on his findings. It also found a genuine factual dispute about Russo’s involvement in the investigations and terminations. The court rejected the defendants’ argument that individuals could not aid and abet an employer’s discriminatory conduct merely because they participated in the conduct underlying the employer’s liability. It denied summary judgment on the aiding-and-abetting claims against the individual defendants.

Disposition

Judge Philip M. Halpern denied the defendants’ renewed motion for summary judgment. The court did not enter judgment for either side on the merits of the remaining claims. It directed the parties to meet and confer and file pretrial materials, and scheduled a pretrial conference for October 26, 2023.