Title VII and the McDonnell Douglas Test: Ninth Circuit Clarifies “Confusing” Case Law

A recent Ninth Circuit decision, Lui v. DeJoy, sheds important light on the oft-confusing application of the McDonnell Douglas burden-shifting framework in Title VII discrimination cases. In a significant clarification, the court reiterated that an employee can satisfy the fourth element of the prima facie case under McDonnell Douglas simply by showing that they were replaced by someone outside their protected class—dispelling the notion that they must also demonstrate that the replacement was "similarly situated."

It is important to note that while the Ninth Circuit refers to this as the "fourth element of McDonnell Douglas," this terminology can be misleading. The element in question is actually the fourth element of the prima facie case, which is itself only the first of three steps in the McDonnell Douglas burden-shifting analysis. This distinction is crucial to understanding the framework correctly.

Background of the Case

Dawn Lui, a Chinese-American woman and longtime USPS employee, was removed from her position as Postmaster in Shelton, Washington, and demoted to a lower-paid Postmaster role in Roy, Washington. She was replaced by a white male with less experience. Lui alleged that she was subjected to discrimination based on race, sex, and national origin and filed suit under Title VII. The district court granted summary judgment for USPS, concluding that Lui failed to establish a prima facie case under McDonnell Douglas because she had not shown that a "similarly situated" individual outside her protected class was treated more favorably.
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The Ninth Circuit reversed the district court’s ruling on this issue, criticizing the lower court’s reliance on an improperly truncated version of the McDonnell Douglas test.

Clarifying the Fourth Element of the Prima Facie Case in McDonnell Douglas

The McDonnell Douglas framework, established by the U.S. Supreme Court, is a three-part test used to determine whether an employer engaged in unlawful discrimination:

1. The plaintiff must first establish a prima facie case of discrimination.
2. The burden then shifts to the employer to articulate a legitimate, nondiscriminatory reason for the adverse employment action.
3. If the employer does so, the burden shifts back to the plaintiff to demonstrate that the employer’s stated reason is a pretext for discrimination.

​The prima facie case itself consists of four elements:

1. The employee belongs to a protected class.
2. The employee was qualified for the position.
3. The employee suffered an adverse employment action.
4. The position remained open, was filled by someone outside the protected class, or "similarly situated" individuals outside the protected class were treated more favorably.

​The district court, in granting summary judgment, relied on cases that required a plaintiff to show "similarly situated" employees were treated more favorably, ignoring precedent that also allows a plaintiff to meet the fourth element simply by demonstrating that their position was filled by someone outside their protected class.

The Ninth Circuit’s Key Holdings

The Ninth Circuit emphasized that the Supreme Court and previous Ninth Circuit cases have long recognized that an employee meets the fourth element of the prima facie case by showing either that they were replaced by someone outside their protected class or that similarly situated individuals outside their protected class were treated more favorably.

The court clarified that the "similarly situated" requirement is an alternative means of proving discrimination, not an additional hurdle for employees who can already show that they were replaced by someone outside their protected class. This distinction is important, as the "similarly situated" analysis often presents unnecessary barriers for plaintiffs due to subjective employer practices and differing job responsibilities among employees.

Implications for Employees and Employers

The Ninth Circuit’s decision provides much-needed clarity and ensures that employees are not unfairly burdened by an overly restrictive interpretation of McDonnell Douglas. This ruling confirms:
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• Employees who are replaced by someone outside their protected class have a viable claim under Title VII without needing to prove differential treatment of "similarly situated" colleagues.
• The "similarly situated" analysis remains an alternative means of satisfying the fourth element, but it is not a universal requirement.
• For employment attorneys handling discrimination cases, this ruling strengthens arguments that a replacement by someone outside the protected class alone can establish a prima facie case, making it more difficult for employers to win summary judgment.

If you believe you have been subjected to discrimination in the workplace, this case highlights the importance of consulting with an experienced employment attorney to assess your claims and protect your rights under Title VII.