UPS Manager’s Retaliation Claim Fails – Time card Alteration Instructions Justified Discipline

On November 25, 2019, the Tenth Circuit Court of Appeals affirmed the federal trial court’s ruling that a UPS manager could not “shoulder his burden” to demonstrate that UPS’ legitimate, non-retaliatory reason for disciplining the manager was a pretext for retaliation. The case is Payan v. United Parcel Service (10th Cir. 2019).

In December 2014, Charles Payan, a UPS worker, sued UPS for racial discrimination and retaliation, among other claims. While the lawsuit was pending, Mr. Payan became a business manager for UPS. Shortly after UPS promoted Mr. Payan, the company discovered that Mr. Payan had been instructing supervisors to modify and adjust drivers’ time cards to show that drivers had taken 30-minute lunch breaks, even where they hadn’t. UPS then launched an investigation and discovered that Mr. Payan had also attempted to cover up his instructions. Mr. Payan’s actions were clear violations of UPS’ policies.

Consequently, UPS disciplined Mr. Payan and determined that Mr. Payan should be stripped of his annual raise and annual stock distribution. Subsequently, Mr. Payan filed a second lawsuit, “alleging that UPS had investigated and disciplined him in retaliation for his earlier lawsuit.”

The district court concluded that while Mr. Payan could establish a prima facie case of retaliation, he had not “carried his burden to show UPS’ stated reasons for discipline were pretextual.” Mr. Payan appealed. Specifically, Mr. Payan alleged that “UPS demonstrated pretext by (1) offering inconsistent or implausible justifications for his discipline, (2) deviating from company policy and protocol, and (3) failing to discipline similarly-situated employees.” Responding to each allegation, the Tenth Circuit affirmed the district court, ultimately concluding that “Mr. Payan ha[d] not carried his [ ] burden to show that UPS’[ ] basis for discipline was pretextual.”

First, the Tenth Circuit found that “UPS gave a clear explanation for its disciplinary decision…[i]t specified exactly which policy Mr. Payan had violated and described his offending conduct.” Secondly, the Tenth Circuit concluded that Mr. Payan could not demonstrate that UPS engaged in any disturbing procedural irregularities concerning its own investigatory or disciplinary procedures. Finally, Mr. Payan could not demonstrate that he was treated differently than any similarly-situated employees, or that the other employees who received a lesser-form of discipline had “engaged in conduct as egregious as his own.”

The Tenth Circuit covers Colorado, Kansas, Utah, Wyoming, Oklahoma, and New Mexico. For employers in all states, but particularly for the states listed, this case highlights the importance for employers to be consistent in their explanations and justifications for disciplinary decisions, closely adhere to their investigatory and disciplinary procedures, and treat similarly-situated employees consistently.