August 18, 2017  |  Articles

Employment Law: Final Warning Dooms Employee’s Discrimination Lawsuit

Office Workers Walking Up Stairs

By Amanda M. Jones

A Hawai‘i appellate court recently ruled that an employee’s sex discrimination lawsuit was properly dismissed because the employee failed to present any evidence showing that her termination was discriminatory.  In so ruling, the appellate court relied heavily on a ‘final written warning’ issued to the employee in which the employer advised that further mistakes would result in termination.

Employee Mistake Results in NLRB Charge

According to a recent decision issued by Hawai‘i’s Intermediate Court of Appeals, Arley Nozawa was employed by the Operating Engineers Local Union No. 3 (the “Union”) when she made a “serious dispatching error.”  The error reportedly caused one of the Union’s members to lose a job opportunity, prompting the member to file an unfair labor practice charge against the Union with the National Labor Relations Board.  The Union paid the member nearly $20,000 to settle the NLRB charge.

Final Warning Issued

The Union said the dispatching error that resulted in the NLRB charge was not Nozawa’s first mistake.  The Union’s financial secretary was ready to fire Nozawa after the dispatching error, but was persuaded to give Nozawa a ‘final written warning’ instead.  The final warning explained that Nozawa was continuing to make numerous mistakes, some of which were “seriously exposing [the Union] to potential legal liability.”  It concluded with a warning that “any further mistakes on your behalf in carrying out your duties, will result in the immediate termination of your employment.”  The Union maintains that Nozawa continued to make mistakes after she received the final written warning.  The Union says that “as part of a staffing reorganization,” it terminated Nozawa’s employment about 10 months after the issuance of the final written warning.  Nozawa was replaced by a male employee.

Employee Sues for Sex Discrimination

Nozawa sued the Union claiming she was terminated based on her sex in violation of Hawai‘i law.  The Union sought dismissal of the lawsuit based on evidence the Union presented that the termination was due to Nozawa’s repeated errors and the staffing reorganization, and not Nozawa’s sex.  Nozawa disputed that she had been performing poorly and claimed she had been “falsely accused” of making the dispatching error that resulted in the NLRB charge.  The trial court judge agreed with the Union that Nozawa had failed to present evidence that warranted the case going to trial, so the case was dismissed.  Nozawa appealed the dismissal to the Hawai‘i Intermediate Court of Appeals (the “ICA”).

Final Warning Supports Union’s Case

The ICA agreed that Nozawa’s case was properly dismissed.  In so ruling, the ICA explained that the Union had “articulated legitimate and nondiscriminatory reasons for Nozawa’s termination” citing the consideration given by the Union to Nozawa’s errors and the ‘final written warning’ during its staffing reorganization.  The court explained that while Nozawa had disputed making a mistake, she had provided “no documentation or further details about disputing the Final Written Warning.”  Additionally, Nozawa did not contest that a reorganization had occurred nor did she provide evidence that she was more qualified than the male who took Nozawa’s dispatcher position after she was fired.

Nozawa v. Operating Engineers Local Union No. 3, CAAP-14-21 (Haw. Ct. App. June 21, 2017)

Bottom line

Nozawa could still challenge the ICA’s decision by asking the Hawai‘i Supreme Court to overrule it and if she does, we likely wouldn’t know the outcome for several months.  In the meantime, the ICA’s decision is a good reminder of the importance of documenting employee performance problems as well as the consequences if improvement does not occur.  That evidence provided strong support for the Union’s position that it had a legitimate basis for terminating Nozawa that was unrelated to her sex, thereby defeating her claim of discrimination.

Amanda M. Jones is a partner in Cades Schutte’s Litigation Department. She is currently the editor of Hawai‘i Employment Law Letter, where this article first appeared. In that role, she is also a member of Employers Counsel Network.