Termination For Non-Performance Upheld

In a recent decision, the Sixth Circuit Court of Appeals upheld the termination of the executive director of a non-profit corporation when she failed, over several years, to balance the budget. In doing so her assertions that she was terminated on the basis of her sex and that she was held to a stricter standard than was her male successor were rejected. Gunn v. Senior Services of Northern Kentucky, No. 15-5320 (6th Cir. Dec. 7, 2015).

Gunn was in 2000 hired as the Executive Director of Senior Services of Northern Kentucky ("SSNK"); eventually she as well accumulated the titles of President and CEO. By 2006 the corporation was operating at a deficit; losses were being covered by a related endowment. In 2006 the operating deficit was $101,000 and in 2008 it was $81,653. The Board, in June, 2008, directed that management's goal was "to react to the [funding] cuts and achieve a balanced budget in 2009." Slip op. at 2. Instead, in 2009 the deficit was $93,000, and the estimate for the 2010 budget was estimated to be as high as $150,000. The Board reiterated its direction that a balanced budget needed to be achieved. In July, 2010 a new Board Chair told Gunn that her number-one priority is a balanced operating budget. Still, on May 25, 2011 an operating budget deficit of $183,223, along with a projected deficit for the year of $281,417, were reported to the Board. Gunn submitted a 2012 budget showing a $164,000 deficit, an action "That signaled the end of Gunn's tenure at SSNK." Slip op. at 4. Gunn responded by bringing suit under the Civil Rights Act of 1964 and Kentucky's similar law, asserting, inter alia that she was terminated on the basis of her sex. SSNK moved for summary judgment, which was granted by the trial court. That determination would be upheld by the Court of Appeals.

Claims of discrimination on the basis of sex move through a three stage analysis: first, does the plaintiff make out a prima facia case of discrimination; second, does the defendant offer a legitimate, non-discriminatory basis for the action taken; and third, can the plaintiff demonstrated that the proffered legitimate basis is a pretext? Slip op. at 6, citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). In this case SSNK pointed to the repeated failures to achieve a balanced operating budget as a nondiscriminatory basis for Gunn's termination. In response thereto the burden shifted to Gunn to establish pretext, which requires that the plaintiff...