NLRB Finds Employer’s Changing Termination Reasons Demonstrate Pretext


In a case on remand from the U.S. Court of Appeals for the Third Circuit, the National Labor Relations Board found that an employer’s shifting explanations for an employee’s termination established pretext, and that the employee was actually terminated for engaging in concerted activity protected under the National Labor Relations Act.

In MCPc Inc., during a company meeting, an employee commented that several engineers could have been hired for the salary of a new executive. The employee was terminated without a reason being given. The ALJ found, however, and the Board agreed, that the employee had actually been terminated for engaging in protected concerted activity during the meeting.

On appeal to the Third Circuit, the court found that the Board had applied the wrong test in analyzing the employer’s motive for the termination by failing to give adequate consideration to the employer’s reasons for termination. The Wright Line test should have been utilized, under which the Board’s General Counsel must show that an employee’s protected or union activities were a motivating factor in the employer’s adverse employment decision. The case was then remanded to the Board to apply the Wright Line test.

Notably, in the initial proceedings, the employer asserted that the employee had been terminated for accessing and disseminating salary information in violation of the company’s confidentiality policy. In its post-hearing brief, the employer then claimed that the employee’s termination was based on his violation of the confidentiality policy and his dishonesty during the company’s investigation into how the employee knew the salary information. Upon remand, however, the employer then asserted that the employee was terminated only for his dishonesty, and not his violation of the confidentiality policy. The Board found these shifting reasons for termination demonstrated pretext under Wright Line.

This case highlights the importance for employers to provide a reasonable and consistent explanation for adverse employment decisions, as changing reasons may suggest an improper motive.