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Weil v. Citizens Telecom Servs., No. 16-35813 (9th Cir. Apr. 29, 2019)

When a former supervisor - later reassigned - tells an employee that they were not promoted because "[y]ou're not white" and "you're not female," can the statement be used to prove a discriminatory motive over a hearsay objection? A panel of the Ninth Circuit holds 2-1 that the statement is admissible against the employer as a party admission.

Weil v. Citizens Telecom Servs., No. 16-35813 (9th Cir. Apr. 29, 2019): Plaintiff Weil (a man of East Indian descent) rose from call-center employee to manager, and finally to interim acting director, "reporting directly to L.H., the Senior Vice President of Call Centers." L.H. was charged with filling the permanent director position and recommended that Weil be a finalist for that job in 2013. Before the process was completed, though, L.H. was transferred to other duties and eventually terminated.

When Weil was turned down in favor of a white woman candidate - one with a lower performance rating and who lacked preferred educational credentials - L.H. told Weil:

"She had made it a - that the statement saying that she felt I was qualified for the job. She tried to get me into the director role; had three things that were against me, and her exact verbiage - I remember this clearly - is 'You have three things going against you. You're a former Verizon employee, okay. You're not white. And you're not female.'"

L.H. was fired in June 2013. Weil was terminated in August 2013 for alleged performance reasons.

Weil brought suit under Title VII, § 1981, and Washington state law both for the failure to promote and the termination. The district court held that L.H.'s statement was not admissible as a party-admission "because L.H. was not employed in the supervisor position at the time L.H. made the statement to Weil," and it then granted summary judgment on all claims.

The Ninth Circuit reverses in part. The panel majority holds that L.H.'s statement ought to have been considered as a non-hearsay under Federal Rule of Evidence 801(d)(2)(D), and thus the plaintiff presented enough evidence of a discriminatory motive on the failure to promote claim to go to a jury.

As the panel majority summarizes the law, under Rule 801(d)(2)(D), "a statement is not hearsay and may be admitted against an opposing party if the statement 'was made by the party's agent or employee on a matter within the scope of that relationship and while it existed."

The crux of the dispute is whether, as part of the foundation of the party admission, the declarant had to be "in the same position that resulted in the matter being within the scope of the employment relationship" at the time the statement was made. Here, L.H. was still an employee at the defendant, but was no longer a decisionmaker on the promotion.

The panel majority holds that a party admission "may concern a matter within the scope of employment-even though the declarant is no longer involved with that particular matter when the statement is made-so long as the declarant was involved with that matter at some prior point in his or her employment." It reaches this conclusion citing the plain language of the rule, the decisions of other circuits, and advisory committee notes. 

The majority opinion notes the agency function of the party-admission exception:

"Neither an employee's knowledge nor her loyalty to her employer disappears at the moment the employee's job description changes. Accordingly, so long as the employment relationship continues to exist, we can presume the declarant is unlikely to make damaging statements unless they are true, even if the declarant is no longer actively involved with the particular 'matter' at issue."

It also notes that if the admissibility of party admissions rode on whether the declarant was currently engaged in the relevant activity, it would "potentially allow employers to avoid liability by merely changing employees' positions or narrowly redefining the scope of their employment."

Once L.H.'s statement was reinstated into the summary judgment record, the panel majority had little difficulty finding a genuine dispute of material fact about the defendant's discriminatory motive. "L.H.'s statement is evidence suggesting that [defendant]'s failure to promote Weil was in part discriminatory. Thus, Weil created a triable question of fact such that the grant of summary judgment was improper under either approach."

The full panel agrees, though, that plaintiff failed to present a genuine dispute on the reason for his termination. "The undisputed evidence, including Weil's performance reviews and his own self-ratings, shows that Weil's performance was steadily declining from 2011 to 2013. Weil's 2013 mid-year review shows an objective total selfreport score of 2.6 out of 5, which Weil admitted reflected performance that was unsatisfactory." Weil also failed to identify any similarly situated employee who displayed similar conduct but was not fired.

Dissenting in part, Judge Bybee would interpret Rule 801(d)(2)(D) to require the proponent, as part of the foundation of a party-admission, to show that the statement was made by someone presently engaged in the process or decision being challenged in the suit. The dissent would emphasize the representative nature of party admissions: "Federal Rule of Evidence 801(d)(2)(D) is not only an exclusion from the hearsay rule, it is a powerful rule of attribution: If admitted, L.H.'s statement becomes [defendant]'s statement, as L.H. is presumed to be speaking on behalf of her employer."

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