On June 9, 2003, in Desert Palace, Inc. v. Costa, the United States Supreme Court issued a unanimous decision reducing the burden of proof for plaintiffs pursuing “mixed-motive” employment discrimination cases. In an opinion written by Justice Clarence Thomas, the Supreme Court ruled that when defendants articulate legitimate reasons for their employment actions, plaintiffs do not have to produce “direct” evidence of discrimination to reach a jury. Without a direct evidence requirement, employers will have a more difficult time succeeding on summary judgment motions, and plaintiffs are more likely to get their cases before juries, with the opportunity for significant monetary recoveries.

In the case before the Court, Catharina Costa sued her employer, Caesar’s Palace Hotel & Casino, after she was terminated from her job as a warehouse worker and heavy equipment operator. The employer asserted that Costa was terminated because she had a fight with a male employee and had a prior disciplinary record of problems on the job. The male employee was only suspended for five days because he had a clean disciplinary record. Costa, however, claimed that as the only female at the job, she had been “singled out” for disciplinary actions, subjected to numerous “sexbased slurs,” stalked by her supervisor, and treated less favorably than her male counterparts in the assignment of overtime.

The District Court found Costa’s evidence sufficient to challenge her employer’s claimed legitimate reasons for her termination and gave the jury a “mixed-motive” instruction. A“mixed motive” instruction applies to cases in which employers take both lawful and impermissible factors into account when making employment decisions. Subsequently, the jury awarded Costa over $364,000 in back-pay, compensatory damages and punitive damages. The U.S. Court of Appeals for the Ninth Circuit initially vacated the decision, finding that Costa had not presented “substantial evidence of conduct or statements by the employer directly reflecting discriminatory animus.” An en banc panel later reinstated the verdict, however, holding that Costa’s evidence was sufficient to warrant a mixed-motive jury charge.

By affirming the en bancdecision, the Supreme Court resolved a long standing conflict between the circuit courts of appeals generated by the Supreme Court’s plurality decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). Some circuits, relying on Justice Sandra Day O’Connor’s concurring opinion in Price Waterhouse, required plaintiffs to produce “direct evidence” of their employers’ discriminatory motivations to secure mixed-motive jury instructions. Although these circuit courts often differed on the precise definition of “direct evidence,” they agreed that mixedmotive plaintiffs should be held to a higher burden of proof than is normally required in civil cases. In Price Waterhouse, Justice O’Connor wrote that plaintiffs should be required to produce direct evidence that an illegitimate consideration was a “substantial factor” in the employment decision. On the other hand, the plurality of four justices ruled that plaintiffs should only be required to prove that an impermissible consideration was a “motivating factor.”

In Costa, however, the Supreme Court looked directly to the Civil Rights Act of 1991, which was enacted in part to resolve the Price Waterhouse plurality decision. Section 107 of the 1991 Act states that the complaining party succeeds at the first stage of the litigation if she “demonstrates that race, color, religion, sex, or national origin was a motivating factor” (emphasis supplied) for the employment decision, even if other legitimate factors also were taken into account. Justice Thomas found that the use of the word “demonstrates” indicated that direct evidence was not required to get to a jury: “On its face, the statute does not mention, much less require, that a plaintiff make a heightened showing through direct evidence.”

Furthermore, the Costa court noted that Congress explicitly defined the word “demonstrates” as meeting “the burdens of production and persuasion.” Justice Thomas concluded that Congress’s failure to include in its definition any requirement of direct evidence was “significant” because Congress is often explicit when it imposes heightened proof requirements in other circumstances. The Costa Court concluded that given the “utility of circumstantial evidence in discrimination cases,” there was no reason to depart from the general rule of civil litigation which allows plaintiffs to prove their cases using either direct or circumstantial evidence.

PRACTICAL EFFECT

The Supreme Court’s holding in Costa reinforces the value of circumstantial evidence in employment discrimination cases. Because it is often difficult to obtain direct evidence (e.g., employer statements of discriminatory motive or animus), the Costa decision will likely benefit plaintiffs by allowing them to prove their cases with more readily available circumstantial evidence. Justice Thomas stressed that “[t]he reason for treating circumstantial and direct evidence alike is both clear and deep-rooted: ‘Circumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence.’”

While scholars will debate the precise meaning of the Costa decision, employers should be aware that the Supreme Court has likely made it easier for plaintiffs to get their cases before juries. Costa highlights the litigation risks inherent in employers’ termination decisions and underscores the advisability of having such decisions reviewed in advance by employment counsel whenever possible.