“Direct” v. “Indirect” Discrimination Tests: Seventh Circuit Says There’s No Difference

Darrell VanDeusen
Darrell VanDeusen

In an effort to clarify the way discrimination claims are evaluated by judges in the Circuit, the Court of Appeals for the Seventh Circuit has overruled Circuit precedent requiring employees to prove allegations through either a “direct” or an “indirect” method that showed a “convincing mosaic” of discrimination.  Ortiz v. Werner Enters., Inc., 2016 U.S. App. LEXIS 15284 (7th Cir. Aug. 19, 2016).

The underlying facts of the case are unimportant.  Suffice it to say that Henry Ortiz, an employee of Mexican ethnicity, alleged that he was subjected to discrimination and a hostile work environment.  Specifically, he claimed he endured racial and ethnic slurs and was then fired from his job.

The district court granted the employer’s motion for summary judgment, holding that Ortiz could not show a “convincing mosaic” of discrimination under either the “direct” or “indirect” analysis of the evidence.  Using these methods, admissions of culpability and smoking-gun evidence are assigned to the “direct” method, while suspicious circumstances that might permit an inference of discrimination are assigned to the “indirect” method.  The district court treated each method as having its own elements and rules, concluding that Ortiz failed to present a “convincing mosaic” under the direct method because the alleged racial slurs had nothing to do with Ortiz’s termination.

The result was, essentially, “yes, there were racial slurs at work” and “yes, he was fired from his job,” but those two things go into separate boxes for analysis.  Neither box alone was enough to show the “convincing mosaic” necessary to let Ortiz get his case to a jury.

Reversing the district court, the Seventh Circuit (Judge Easterbrook wrote the decision, joined by Judges Posner and Hamilton) noted that the court below “did not try to aggregate the possibilities to find an overall likelihood of discrimination.”  This effort by the district court to “shoehorn all evidence into two ‘methods,’ and its insistence that either method be implemented by looking for a ‘convincing mosaic,’ detracted attention from the sole question that matters:  Whether a reasonable juror could conclude that Ortiz would have kept his job if he had a different ethnicity, and everything else had remained the same.”

Judge Easterbrook wrote that the time has come “to jettison these diversions and refocus analysis on the substantive legal issue.”  First, said the judge, “‘convincing mosaic’ is not a legal test . . . .   From now on, any decision of a district court that treats this phrase as a legal requirement in an employment-discrimination case is subject to summary reversal, so that the district court can evaluate the evidence under the correct standard.”

Second, he continued, the correct legal standard “is simply whether the evidence would permit a reasonable factfinder to conclude that the plaintiff’s race, ethnicity, sex, religion, or other proscribed factor caused the discharge or other adverse employment action.  Evidence must be considered as a whole, rather than asking whether any particular piece of evidence proves the case by itself-or whether just the ‘direct’ evidence does so, or the ‘indirect’ evidence.  Evidence is evidence.  Relevant evidence must be considered and irrelevant evidence disregarded, but no evidence should be treated differently from other evidence because it can be labeled ‘direct’ or ‘indirect.’

Finally, the court cautioned that it was not suggesting its decision was a departure from the well-settled McDonnell Douglas formulation for analyzing disparate treatment cases:  “The burden-shifting framework created by McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), sometimes is referred to as an ‘indirect’ means of proving employment discrimination. Today’s decision does not concern McDonnell Douglas or any other burden-shifting framework, no matter what it is called as a shorthand.  We are instead concerned about the proposition that evidence must be sorted into different piles, labeled ‘direct’ and ‘indirect,’ that are evaluated differently.  Instead, all evidence belongs in a single pile and must be evaluated as a whole. That conclusion is consistent with McDonnell Douglas and its successors.”

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