Racial discrimination lawsuit against Humana reinstated

CINCINNATI—A federal appeals court has reinstated a putative class action racial discrimination case brought by a former Humana Inc. employee in a technical legal ruling.

According to Monday's 6th U.S. Circuit Court of Appeals ruling in Kathryn Keys vs. Humana Inc., Ms. Keys, a former director at the Louisville, Ky.-based health insurer who is African-American, stated that after two reorganizations, her role and responsibilities had been diminished unlike those of Caucasian directors.

Humana terminated Ms. Keys' employment in June 2008, citing a 2006 negative performance assessment and ignoring a 2007 favorable performance appraisal, according to the ruling. Ms. Keys filed a lawsuit against Humana in October 2009.

A district court dismissed the suit in July 2010, concluding that Ms. Keys had failed to establish a prima facie case of racial discrimination under the McDonnell Douglas framework.

This framework, which stems from a 1973 U.S. Supreme Court decision in McDonnell Douglas Corp. vs. Green, states that to establish a prima facie case, a plaintiff must establish that she is member of a protected class; that she was qualified for her job; that she suffered an adverse employment decision; and that she was replaced by a person from outside the protected class, or treated differently than similarly situated nonprotected employees.

The district court found Ms. Keys had failed to meet the last qualification.

However, the appellate court said the district court had incorrectly applied the McDonnell Douglas framework in its ruling because it should be used as a standard to evaluate evidence, not merely to plead a case.

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“The district court's requiring that Keys' complaint establish a prima facie cause under McDonnell Douglas and its progeny is contrary to Supreme Court and 6th Circuit precedent,” said a three-judge panel's unanimous ruling.

Citing the Supreme Court's 2002 ruling in Swierkiewicz vs. Sorema N.A., the appellate court said, “The Supreme Court unanimously held that the prima facie case under McDonnell Douglas is an evidentiary standard, not a pleading standard…As the court reasoned, 'it is not appropriate to require a plaintiff to plead facts establishing a prima facie case because the McDonnell Douglas framework does not apply in every employment discrimination case.”

“Keys adequately alleged the components of her claim and of her class action case, both of which now may be defined further through the discovery process,” the court said, in remanding the case.

A Humana spokesman could not immediately be reached for comment.

Commenting on the ruling, Jonathan T. Hyman, a partner with law firm Kohrman Jackson & Krantz P.L.L. in Cleveland, who was not involved in the case, said the Federal Rules of Civil Procedure, which sets out pleading standards for complaints filed in federal court, “simply requires a short and plain statement of the claim.”

As federal courts become more comfortable analyzing discrimination claims, the need of the McDonnell Douglas analysis is “falling by the wayside,” he said.

In a related ruling, the 6th Circuit late last month upheld an award to an African-American custodian who accused a school district of racial discrimination and retaliation in connection with his demotion and transfer to another school in Clifford Litton vs. Talawanda School District.