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Discriminatory Demotion

Discriminatory Demotion

We will discuss, in this posting, the facts and issues of a case called Cornwell v. Electra Central Credit Union, No. 04-35408, U.S. Court of Appeals, Ninth Circuit, which held that the plaintiff Raymond Cornwell could argue at trial that he had been demoted because of his race. Unfortunately, he was not able to argue that he had been fired by the CEO for complaining about the CEO's practice of sexual harassment.

FACTS:

  • Plaintiff Cornwell, was the Vice President and Chief Operating Officer of Electra when Jim Sharp was hired as the CEO of Electra. Cornwell was African-American.
  • Although Cornwell had worked with Electra for 8 years and had been promoted twice, Sharp demoted Cornwell to Vice President of Lending and replaced him with a white person who had much less experience.
  • Cornwell complained to Bob Pearson, a member of Electra's Board of Directors, that he disagreed with Sharp's decision to demote him and also told him that his race might have been a factor in Sharp's decision.
  • Sharp also allegedly made comments about women that Cornwell considered unprofessional and close to sexual harassment. Cornwell told HR about these comments but did not explicitly tell HR to investigate them, nor did HR do so.
  • The chairman of the Board of Directors sent a letter to Cornwell stating that his race had never been a factor in any decisions regarding his employment. However, there was no indication that any investigation had occurred regarding the alleged race discrimination.
  • Eventually, Cornwell was terminated.

Court's Analysis

  • The Court held that, given the facts, a jury might infer that Cornwell was treated differently because of his race. For example, Cornwell was the only African American member of Electra's management team and the only senior executive whom Sharp demoted; Sharp excluded Cornwell from management meetings that involved topics within Cornwell's scope of responsibility; and the white employee who replaced Cornwell had significantly less management experience that Cornwell. The Court decided that a jury could conclude that Sharp excluded Cornwell for discriminatory purposes rather than business reasons.
  • Regarding Cornwell's alleged retaliation claim, the Court noted that because the evidence showed that Sharp and Potter discussed Cornwell's complaint about Sharp's sexual harassment after Cornwell's demotion, it minimized Cornwell's retaliation claim. In addition, although Cornwell claimed that Sharp had threatened to fire any member of Electra's management team who circumvented Sharp and spoke directly to the Board of Directors, there was sufficient evidence that Cornwell had been terminated for not cooperating with Potter during severance negotiations.

Conclusion

  • In this case, there was evidence of possible race discrimination since Cornwell was excluded from important meetings because of his race, demoted, and replaced with a Caucasian individual who had significantly less experience. Also, Cornwell's claim of race discrimination was never investigated.
  • If you feel that you have a similar situation (maybe not necessarily based on race), consult this office immediately.
  • If you think that your employer may terminate you because you made a serious complaint (and thus retaliate against you), contact this office for a consultation for advice on how to deal with your employer.

Employee Rights Attorney Frank Pray

5160 Campus Drive

Newport Beach CA 92660

949.251.1006

877.job.atty


OBTAIN YOUR FREE

CASE EVALUATION

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