Corporate mergers are famous for creating shareholder “value” by cutting costs. Many times, those costs are the pay and benefits of employees who find themselves laid off—and possibly discriminated against in the process.
The University of Tennessee merged its men’s and women’s athletic departments in 2012. Of the 15 people laid off, 12 were women. Sex and age discrimination and retaliation lawsuits were later filed, and the public university’s athletic department has paid over a million dollars to settle them.
Claims of Unequal Pay Lead to Layoffs After Consolidation of Departments
A settlement of the legal claims of three former employees was announced in January, according to The Tennessean. The total amount coming from the athletic department hasn’t been finalized but would range from $1.05 million to $1.225 million (depending on the payment of attorneys’ fees). The lawsuit was filed by two women and a man who claimed gender discrimination and retaliation. One of the plaintiffs, Collin Schlosser, claimed he suffered sex discrimination because he was associated with the school’s women’s athletics department.
Schlosser, Jenny Moshak, and Heather Mason were employed by the university’s women’s athletics department prior to its merger with the men’s department in 2012.
- Before the merger, the university was one of the few major universities in the country with separate athletics departments for men and women.
- The plaintiffs claimed less qualified and less experienced male employees in the men’s athletics department received better jobs when the two departments were combined.
As a result of the merger, Mason and Moshak learned that similarly situated men employed in the men’s athletic department earned more money and received better benefits.
- The two filed an internal discrimination complaint. The university found that the department failed to follow internal policies but that no illegal discrimination had occurred.
- That decision was eventually overturned by university chancellor Dr. Jimmy Cheek, who decided that no policy violation or illegal discrimination had occurred.
- Administrators claimed the male employees deserved higher pay because of the “complexities of football,” though they never explained what that meant.
Mason and Moshak later filed a discrimination complaint with the federal Equal Employment Opportunity Commission.
After the consolidation, Schlosser lost his job and Moshak and Mason were essentially demoted, given lesser positions in the new, consolidated department compared to their former jobs in the women’s athletics department. According to the lawsuit, 86% of those laid off were women, while seven of the eight members of Athletics Director and Vice Chancellor David Hart’s leadership team were men.
Hart was hired by the university to serve in that role after the decision to merge the departments, but the school left how to implement the changes to him. The complaint portrayed Hart as a key player and a man not to be trifled with.
- Hart allegedly told staff he would not tolerate criticism of his decisions, made sure minutes were not kept of his meetings, and replaced female employees with higher-paid male ones.
- The complaint asserted that Hart was accused of sex discrimination at other colleges he worked for in the past.
- During his tenure at Eastern Carolina University, Hart allegedly organized tailgate parties featuring bikini contests.
Was Employee Insubordinate or Speaking Truth to Power?
In a related case, another successful plaintiff and former employee of the former University of Tennessee’s women’s athletic department, Debby Jennings, settled her age, sex discrimination, and retaliation claims against the university and Hart in 2014 for $320,000, according to ESPN. Jennings worked for the university for 35 years, most recently as the media director for the women’s athletics department until her forced retirement in 2012.
ESPN reported that Jennings’ lawsuit alleged the following:
- Jennings lost her job either due to her gender and age.
- Alternatively, she lost her job as retaliation for advocating gender-equity issues; opposition to sex discrimination against female student athletes; and sex, disability, or age discrimination concerning employees.
- Hart and others were claimed to have “fostered a culture of intimidation and hostility in the athletic department where employees questioning them or their ideas in any manner were regarded as disloyal or divisive.”
- Hart and others wanted the new, combined athletic department to be a “good ol’ boys” club.
- Jennings was 57 years old when she left the university, and her position was filled by a younger man.
- After the merger of the departments, of the 23 executive staff and senior administrative staff positions, only three were held by women.
- She complained to Hart that he was forcing Pat Summitt, the former coach of the women’s basketball team, out of her job due to her illness, early onset Alzheimer’s disease. Jennings claims she suffered retaliation as a result.
After the lawsuit was filed, Hart issued a statement stating that he lost confidence in Jennings because she was insubordinate, disrespectful, and fostered an atmosphere of negativity and division. Summit issued a statement in October 2012 that it was her decision to step down. The settlement includes no admission of wrongdoing by the university or Hart.
Summing It Up
If there is a merger or consolidation involving an employer, layoffs frequently occur. Often, a major reason for the layoffs is cutting costs by having fewer people do the same, if not more, work. However, simply because there is such a merger doesn’t give an employer freedom to lay off people due to their protected characteristics (in these cases sex, age, and prior complaints of discrimination) in violation of federal and state law.
- To succeed, a plaintiff would need to show a prima facie case of discrimination: that she belongs to a protected group, that she was qualified for another position if one were available when she was discharged, that she was discharged, and that the discharge occurred under circumstances suggesting that her protected characteristic was a factor in the decision.
- A defendant must then produce a legitimate, nondiscriminatory reason for the layoff, such as that the consolidation resulted in too many employees and not enough work.
- The burden then shifts back to the plaintiff to show that the reason is untrue and that illegal discrimination was the true culprit.
Depending on the size of the consolidation, the number of layoffs and the positions of those affected these cases could be fairly simple or very complex. The ultimate burden of proof is on the plaintiff. As in these cases, it makes sense in most cases for the parties to compromise, reach a settlement, and avoid the costs and uncertainties of a trial.
If you have lost your job due to a merger or consolidation in Virginia, Maryland, or the District of Columbia and you think discrimination occurred, contact our office so we can discuss your situation, the applicable law, and the best options to protect your legal rights.
