Diana Schaefer worked for Bank Mutual for 10 years, including eight years as a bank office manager. In 2011, Schaefer got a new manager, Tom Kendall, who wanted to terminate Schaefer almost immediately. When Kendall found out that Schaefer had submitted an inaccurate timesheet, despite that fact she was salaried, he told the director of human resources who then fired Schaefer, who was then 56-years-old, and Bank Mutual then hired a 36-year-old woman who lacked management experience. Schaefer sued Bank Mutual alleging age discrimination under the Age Discrimination in Employment Act ("ADEA") in the Western District of Wisconsin, and in an Opinion and Order dated August 29, 2014, Judge James D. Peterson denied Bank Mutual's Motion for Summary Judgment holding that Schaefer "adduced sufficient evidence to support a reasonable jury verdict that Bank Mutual's purported reason for firing her was a pretext, and that Schaefer's age was the but-for case of her termination."
In his decision, Judge Peterson noted the relevant policies of Bank Mutual's regarding attendance and time keeping, as well as their disciplinary policy. Though Schaefer was salaried and her hours were non-consequential to her pay as an exempt employee under state and federal wage and hour laws, Bank Mutual still required her to keep an accurate accounting of the days and hours she worked and had a policy stating falsification could lead to termination, which is how Schaefer came to be fired. Judge Peterson also noted that Bank Mutual fired three (3) other managers for falsifying their time records since 2007, two of whom were over the age of 40.
Schaefer proceeded under the indirect method of proving age discrimination, and the parties agreed to two prongs of the prima facie case: that she is over the age of 40 (thus, in the protected class), and that she suffered an adverse employment action (she was fired). The parties then disagreed over the two remaining prongs: whether she was meeting the employer's legitimate interested, and whether younger employees were treated more favorably. Bank Mutual argued Schaefer was not meeting their legitimate interest because of her falsification of time sheets, and Schaefer naturally argued that this was pretext.
Schaefer argued that the two time sheet errors were merely honest mistakes. The court noted that Bank Mutual's policies state that they may terminate an employee who makes this mistake, and that her mistakes were not "falsification," and though they violated Bank Mutual's policies, they did not do so in a way that would warrant termination under those policies. Furthermore, the Court noted that Bank Mutual declined to initially terminate Schaefer when Kendall first made the recommendation which evidenced that she was meeting their legitimate expectations. Because she was able to show she was meeting Bank Mutual's legitimate interest, she is entitled to the benefit of a more relaxed showing at step four in her prima facie case: she need only show that she was replaced by a substantially younger employee, which she also did.
Judge Peterson ultimately found Bank Mutual's termination of Schaefer to be "suspicious" given their written policies and the offenses for which Schaefer was terminated given Kendall's attempts to get her fired in the past. The court also noted at least one other employee who committed a similar violation and was not terminated like Schaefer. Because Kendall influenced the human resource director's decision so heavily, the court applied the Cat's Paw theory of discrimination.
The case is Diana Schaefer v. Bank Mutual, Case No. 13-cv-713-jdp (W.D. Wis.)