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Labor & Employment – Sex Discrimination – Severance Pay Claim – Lay Off

Labor & Employment – Sex Discrimination – Severance Pay Claim – Lay Off

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Gerner v. County of Chesterfield, Va. (Lawyers Weekly No. 12-01-0344, 10 pp.) (Motz, J.) No. 11-1218, March 16, 2012; USDC at Richmond, Va. 4th Cir. Full-text opinion.

Holding: Reversing the trial court, the 4th Circuit says a female county employee laid off after 26 years on the job can sue under Title VII on a claim that she was offered a less favorable severance package than that offered to male employees who held similar positions.

The district court dismissed the complaint, holding that the terms and conditions of the severance package did not constitute an actionable adverse employment action under Title VII. The trial court said severance benefits must be a contractual entitlement to provide the basis of an adverse employment action under Title VII, and that because the offer of a severance package was made after plaintiff had been terminated, it could not constitute an adverse employment action.

As to the first rationale, Hishon v. King & Spalding, 467 U.S. 69 (1984), forecloses a holding that an employment benefit must be a contractual right in order for its denial to provide the basis for a Title VII claim. The district court’s reliance on Britt v. E.I. DuPont deNemours & Co., 768 F.2 593 (4th Cir. 1985), and two 8th Circuit cases was misplaced. In contrast to the cases relied on by the district court, in situations like that at hand, in which an employee did not volunteer for a change in employment benefits or retain a job in lieu of a new benefit, courts have consistently recognized that the discriminatory denial of a non-contractual employment benefit constitutes an adverse employment action.

The district court therefore erred in dismissing plaintiff’s complaint – that she suffered no adverse employment action because the county fired her before it made its alleged offer – also fails. Her complaint alleges that she remained an employee at the time the county offered the assertedly discriminatory severance package. And Title VII protects both current and former employees from discriminatory adverse employment actions. The district court erred in dismissing the complaint on the ground that plaintiff failed to allege an adverse employment action because she did not allege that the county made its assertedly discriminatory severance offer before it terminated her employment.

Reversed and remanded.

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