The business-judgment jury instruction used in discrimination and retaliation cases is to the effect that an employer has discretion over business judgments even if exercised wrongly. It is a means by which employers seek to obfuscate issues (such as by jurors confusedly equating exercised wrongly with exercised unlawfully) and escape liability for discriminatory and/or retaliatory employment practices. But are employers entitled to the business-judgment instruction as a matter of course? "No" answered the Sixth Circuit recently in Varlesi v. Wayne State University, a pregnancy discrimination and retaliation case in which a jury awarded the plaintiff $848,690 in damages.
The plaintiff, Tina Varlesi, was working on her M.S. in Social Work at Wayne State University, a two-year graduate degree program consisting of both classroom and "field" work at an agency. Varlesi was a star student in her first year. She received "excellent grades in her classes" and perform so well and her fieldwork that "one agency even offered her a job, to commence after she obtained her degree." arlesi became pregnant following her first year, "although she was not married, and during her placement in the fall semester of her second year, the trouble started (though her classroom grades remained excellent)."
The "trouble," despite Varlesi's repeated complaints and despite her continued excellence in her class work, resulted eventually in her being dismissed from the program. She filed suit claiming pregnancy discrimination and retaliation in violation of Title IX and Michigan's Elliott-Larsen Civil Rights Act. The jury awarded her damages of $898,690 ($148,690 economic; $200,000 future; and $500,000 non-economic).
On appeal, the employer, Wayne State University, argued, among other things, that the District Court erred in rejecting its request for a "business-judgment instruction, i.e., Wayne State had discretion over its business judgments, even if they are wrong." This argument was summarily rejected by the Sixth Circuit which explained:
But the decision to discriminate and retaliate against a student and then cover it up, is not a business judgment.
The Sixth Circuit's opinion was authored by Circuit Judge Alice Batchelder, who is not known as generally receptive to plaintiffs in employment discrimination cases, joined by Circuit Judges David McKeague and Jane Stranch.