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A Costly Lack of Training

An appeals court recently ruled that a company's "failure to train" an employee can be an actionable form of employment discrimination. Experts cite the case as another example of the need to be able to demonstrate why an employee didn't receive an opportunity at advancement.

Monday, August 11, 2014
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Can a failure to train an employee for opportunities that may result in greater compensation down the road be grounds for an employment discrimination suit? In the case of Charles E. Reed v. Procter & Gamble Manufacturing Company, the 6th Circuit Court of Appeals said it can.

Charles Reed, an African American, had worked at Procter & Gamble's Pringles plant since 1996. Promoted from a technician position to a technician 2 position one year later, Reed eventually became a technician 3 in 2003.

That promotion, however, was the last Reed received at Pringles, where he remained employed until January 2010, when he was one of two employees in the department whose "extended role" position -- which involved exposure to confidential information or demanded knowledge of environmental or legal compliance requirements -- was eliminated.

According to court records, technicians in Reed's department could determine whether they wished to pursue advancement and then consult with their team leader to "develop a ‘work plan' aimed at meeting the requirements necessary for promotion." The complaint states that employees who opted to pursue a promotion would attend "pre-gap" and "gap" meetings with management to discuss the employee's qualifications for promotion.

From 2005 to 2009, Reed's team leader, Stuart Massey, approved Reed's work plans, which included attaining technician 4 status as a goal, according to the complaint. Reed, however, maintains that Massey assisted other employees with promotional goals on a discriminatory basis. For example, the complaint alleges that Massey approached one white employee to ask if he wanted to attain technician 4 status, and subsequently delayed Reed's technician 4 pre-gap assessment while expediting those of white co-workers.

Reed ultimately filed a lawsuit claiming race discrimination, further alleging that his dismissal was retaliation for voicing the aforementioned complaints to HR, as well as supporting a co-worker's discrimination complaint.

The 6th Circuit Court upheld a trial court's dismissal of the suit, but the appeals court determined that a "failure to equally train" claim is actionable, reasoning that technician 4-level jobs at Procter & Gamble pay more than technician 3-level jobs. As such, the appeals court ruled, the company's alleged failure to train Reed potentially deprived him of compensation he may have earned had he received said training.

One of the "essential elements" of a discrimination claim is the possibility that an employee experienced some type of adverse employment action, which can come in various forms, says Robert Hale, a Boston-based partner and chair of Goodwin Procter's labor and employment practice.

"One factor that courts have considered in assessing whether an adverse employment action has occurred is whether the action affects compensation," he says.

"Here, the court concluded that increased compensation would result from a promotion, and that training was necessary for an employee to receive a promotion," says Hale. "The plaintiff claimed that the company discriminated in providing training opportunities. Since training was essential for promotions, discrimination in training amounted to discrimination in promotions."

Brett Coburn, a partner in the Atlanta office of Alston & Bird, doesn't think the 6th Circuit appeals court "thought it was doing anything remarkable in this case."

"The notion that a failure to provide training could be an adverse employment action; I don't think the court viewed it as something new," says Coburn.

He's quick to add, however, that a "failure to train" is a more subtle and less common component of employment discrimination claims, compared to termination or other adverse actions.

Coburn likens Reed's charges to that of a salesperson who argues that not being sent to a particular conference or being assigned to a lucrative sales territory -- while others were -- could have cost him or her valuable professional connections that in turn led to more sales and, ultimately, more money.

"This case is akin to a situation like that," says Coburn. "A salesperson says, ‘You didn't give me the same opportunities you gave to another employee, and as a result that impacted my compensation.' It's really just a specific application of that general concept."

Such specific claims take employers and HR into a grayer, more subtle area, says Melissa Goodman, a Dallas-based partner at Haynes and Boone, and co-chair of the firm's trade secrets practice group.

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"A lot of times, supervisors know you can't use race or age, for example, as a factor in deciding whether to promote someone," says Goodman. "Similarly, you can't take adverse action against someone because they engaged in a protected activity. But a lot of times the alleged discrimination or retaliation is more obscure."

In this type of case, "I don't think the burden of proof shifts to the employer," she says, "but the employer needs to be able to articulate a legitimate reason or reasons why this person was not trained."

The key, she says, is "having some formal process in place in terms of deciding who gets training, or who attends conferences, or whatever the case may be. And the more unstructured [the process] is, the more opportunity there is to contend that it's discriminatory, unless you can point to a good reason why you made the decision you made."

"Failure to train" claims can have merit "in limited circumstances," adds Hale.

In this case, he says, "the company had a process for employees to work with supervisors on gap assessments and action plans to improve their chances at promotion. The plaintiff claimed the company administered those procedures in a discriminatory manner."

To develop a viable claim involving allegations similar to those made in the Reed case, "the circumstances would need to involve a similar situation in which the company has promotional opportunities for which employees need to be trained, and in which the supervisors have considerable involvement in providing individualized training," says Hale. "That certainly could occur, but it would be most unusual."

Policies to guide the direction of such aspects of the employment relationship should "include but [are] by no means limited to the administration of training for advancement opportunities," he says, noting there "can be a risk of overreaction to any case law development like the Reed decision. If an employer creates policies that it does not follow, that creates greater risk than the risk in the Reed case."\

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