Why Employers Need Consistent Records of Employee Performance

In an example of how informal management can come back to haunt employers, a U.S. District Court judge recently ruled that a former Starbucks regional manager had sufficiently demonstrated that a jury could determine that the justification Starbucks provided in terminating her was pretext for unlawful discrimination.

Plaintiff Shannon Phillips, who is Caucasian, claims that Starbucks discriminated against her and other white employees to repair its public image after drawing negative media attention for the 2018 arrest of two Black men at a Starbucks in Philadelphia, alleging reverse discrimination under Title VII of the Civil Rights, and the New Jersey Law Against Discrimination. Starbucks denies engaging in discrimination, alleging that Plaintiff was terminated for failing to lead and perform her role as a regional manager and, more specifically, was aloof, overwhelmed by the position, and failed to perform the essential functions of her job.

On Starbucks’ motion for summary judgment, the judge determined that Plaintiff had presented sufficient evidence allowing a reasonable jury to conclude that the company discriminated against her and other white employees. The judge further found, however, that Starbucks presented a legitimate, non-discriminatory reason for Plaintiff’s termination. As part of the burden-shifting analysis conducted in discrimination claims, when an employer produces sufficient evidence of legitimate, non-discriminatory reasons for the employee’s termination, the employee must then provide evidence that the employer’s reasons were pretext for discrimination. As it applied to Plaintiff’s claim of discrimination, the judge found that she had presented sufficient evidence creating a genuine dispute of material fact that Starbucks’ stated rationale for terminating her constituted pretext.

More specifically, the judge expressed concern regarding Starbucks’ “lack of documentation” regarding Plaintiff’s alleged poor job performance, finding that “[a]n employer’s lack of documentation about the plaintiff’s poor [job] performance is evidence of pretext.” In Plaintiff’s case, the judge found that there was “meager documentary evidence” memorializing Plaintiff’s alleged poor performance, and “a jury may find, based on this evidence of scant documentation, that [Starbucks’] alleged reason for terminating Plaintiff was pretextual.” Starbucks contends that it had “purged [Plaintiff’s] documents in the ordinary course of business after her termination.”

The foregoing presents employers with a stark reminder that consistent, contemporaneous recordings of employee job performance is of paramount importance, as is ensuring that employee records are adequately maintained even for a period of time after the cessation of that employee’s employment (indeed, State and federal law requires that certain employee records, such as wage and hour and time-keeping records, be maintained for a period of time following an employee’s resignation and/or termination). Relying on the recollection and testimony of fact witnesses regarding the reasons for terminating an employee is not necessarily enough, as the judge in Phillips reminds us. Moreover, fact witnesses can be inherently unreliable, whereas contemporaneous, written documentation setting forth an employee’s poor job performance, when properly authenticated, provides reliable corroboration of an employee’s poor job performance.