Discriminatory Severance Package Violates Title VII

Falling Men (illustration: Siemond Chan)

In Gerner v. County of Chesterfield, 674 F.3d 264 (4th Cir. 2012), the Court (Judge Motz and two district court judges) reversed the district court’s dismissal of plaintiff’s claim that the employer’s decision to offer a female employee a less favorable severance package than that offered to four male comparators, allegedly due to her gender, can violate Title VII.  In so holding, the Court rejected the argument that a reduction in severance pay was not an adverse action because the employee had no contractual entitlement to severance pay.  The Court also rejected the argument that severance pay should not be considered because the offer allegedly occurred in the post-employment context.  In so holding, the Court relied on Hishon v. King & Spalding, 467 U.S. 69 (1984) where the Court had held that any “benefit that is part and parcel of the employment relationship may not be doled out in a discriminatory fashion, even if the employer would be free under the employment contract simply not to provide the benefit at all.”  Id. at 75.  Judge Motz held that “the discriminatory denial of a non-contractual employment benefit constitutes an adverse employment action.”  Further, the Court rejected the argument that plaintiff’s claim could be denied because plaintiff allegedly was a former employee.  First, the Court recognized that Title VII protects both current and former employees.  And, it noted that the allegedly discriminatory severance offer was made to the plaintiff three days  prior to her termination.