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Smalley v. Roche Diagnostic Operations, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

March 14, 2018




         This matter is before the Court on a Motion for Summary Judgment filed by Defendant Roche Diagnostics Operations, Inc. (“Roche”) (Filing No. 57). Plaintiff Stephanie Smalley (“Smalley”) filed this action against Roche asserting violations of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (“Title VII”), when she was terminated from her employment on the basis of race. Roche denies that Smalley was discriminated against because of her race and contends that she was terminated for poor performance. For the reasons set forth below, Roche's Motion for Summary Judgment is granted in part and denied in part.

         I. BACKGROUND

         The following facts are not necessarily objectively true, but as required by Federal Rule of Civil Procedure 56, are presented in the light most favorable to Smalley as the non-moving party. See Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

         Roche is a distributor for in vitro diagnostic devices and supplies with their principal offices located in Indianapolis, Indiana. (Filing No. 58 at 8.) Roche maintains an Equal Employment Opportunity and Affirmative Action policy which explains that it will not engage in any personnel decisions or activities which discriminate and Roche employees are trained on the EEO policy. Id. In addition, Roche maintains a Corrective Action Policy governing employee discipline where managers have discretion under the policy to decide the level of corrective action the employee receives. (Filing No. 58 at 9.)

         Smalley is an African-American woman who began working for Roche as a Payroll Accountant in October 2014. (Filing No. 65-1 at ¶2.) The Payroll Department consists of two separate payroll sub-compartments: the Production Department and the Tax and Accounting Department. (Filing No. 58 at 9.) The two departments are responsible for producing and ultimately completing Roche's payroll for thousands of employees across the country. Id. The Tax and Accounting employees are responsible for timely submitting payment files to banks, and instructing the bank to process the payment so that Roche employees are paid their wages. Id.

         Jesse Lange (“Lange”) previously held the Payroll Accountant position until August 2014 when Lange was transferred to another position within the company. Betty Holt (“Holt”) covered the position from August 2014 until Smalley was hired in October 2014. (Filing No. 58 at 11.) Holt was trained by Lange for six months during which time Lange walked Holt through payroll processes from start to finish including an off-cycle bonus run concurrently with Holt. (Filing No. 65-8 at 4-5.) Smalley alleges that she did not receive adequate training for her position. She received training from Holt for approximately one month during which she watched Holt complete processes and took notes, without actually completing any tasks herself. (Filing No. 64 at 3.) Although Smalley admits to contacting Lange occasionally because he was the “go-to guy in the department, ” Smalley was told, by her supervisor, not to contact Lange to train her on procedures and processes as she was to receive her training from Holt. (Filing No. 64 at 18, 33; Filing No. 65-1 at 2.) Susan McCluskey (“McCluskey”), a Payroll Specialist and later a Payroll Account/Tax Specialist began working for Roche is 2012 and remained at Roche until January 2015. McCluskey trained with Lange for the Payroll Tax Specialist position for almost a year; she also shadowed Holt. (Filing No. 65-7 at 3.) McCluskey's desk was next to Holt's desk during her tenure at Roche, and she observed Holt making numerous mistakes over those years. (Filing No. 65-6 at 2.) When Smalley began her employment at Roche, she was allowed to shadow McCluskey for a month.

         Roche has four primary types of payroll: biweekly; monthly semimonthly; and, off-cycles payroll such as bonus pay. Roche also has an affiliate in Puerto Rico, and that affiliate's employees are on the biweekly payroll schedule. The Puerto Rico payroll covered approximately 220 employees and was due every other Friday without exception. Smalley was responsible for processing and balancing payroll for virtually the entire company which included processing employee paychecks and annual company bonuses-an off cycle payroll-which were due on March 15th each year. The exception was that Holt was responsible for payroll for the “DIA” business unit-a smaller, affiliated business segment within Roche. Smalley had never been trained to do a bonus run. (Filing No. 65-1 at 4.) Roche notes however, that Smalley had successfully completed other off-cycle runs prior to March 2015.

         On December 15, 2014, Lange sent Smalley an email stating that she had done a good job getting caught up on a back log of entries. (Filing No. 65-1 at 7.)

         Wendy Heathcote (“Heathcote”) became Smalley's supervisor in December 2014, and remained her supervisor until Smalley's termination. (Filing No. 65-11 at 18.) Due to her short tenure at Roche, Smalley had only one annual performance review in December 2014 that covered her first two months of employment. The areas of concern included the following:

It has been noticed there is an overall lack of urgency when completing the payroll processing and other job responsibilities. The Payroll Accounting position is a high impact, high visibility role with much responsibility to close out the payroll and post the bank files timely and accurately. Stephanie seems to be struggling with completing these tasks accurately as well as not accepting her role when things do not balance or are incomplete. It has been noticed on payroll days that when payroll closes late, Stephanie has packed up and left for the day with no discussion with the payroll processing team prior to leaving. It is urgent that she remain in lock-step with the processing team to ensure files are posted no matter how late the payroll closes. By not communicating with the team, they have no way of knowing if she is going to provide coverage. Additionally, there is evidence that Stephanie does not understand the systems and processes she is in charge of. Mistakes are made, and questions are consistently being asked that indicate a lack of in-depth critical thinking related to the processes she performs.

(Filing No. 65-11 at 25.) Positive feedback included Smalley's willingness to collaborate and her likeability among her peers and department/SSC management teams. Id. Heathcote stated “I have no doubt as she continues to grow within her role, she will continue to build the relationships necessary to be successful.” Id. Smalley received a salary increase after being with Roche for 4 ½ months and it was noted that she was fully meeting expectations. (Filing No. 65-10 at 10.)

         As noted previously, Holt was responsible for processing the DIA business unit payroll and Smalley was responsible for processing the regular payroll and bonus runs. Regular payroll had to be completed before bonus runs. The files were required to be sent together, otherwise the two files would merge and the bank would be unable to identify and properly process them for payment. In March 2015, Roche alleges that Smalley sent her completed portion of the regular payroll without waiting for Holt's DIA payrolls because Smalley could not find Holt. (Filing No. 58 at 9.) Roche alleges Smalley's failure to include Holt's portion of the payroll set in motion a chain of events that led to multiple errors in processing the bonus run (including duplicate payments) and ultimately the team had to stay late into the evening on March 11, 2015 to complete the initial bonus run by the close of business.

         Heathcote discovered the duplicated payments issue on March 12, 2015, which required the team to spend a second night working many hours to correct the error in order to prevent significant losses to the company. (Filing No. 58 at 18.) Heathcote, along with other members of management, determined that Smalley was solely responsible for the mistakes that occurred throughout the process. Upper-management personnel Tom Adkins (“Adkins”) and Cindy Brandt (“Brandt”) wanted to terminate Smalley at that time for the critical errors, but Heathcote persuaded them to give her another chance. Instead, on March 25, 2015, Smalley received a written disciplinary notice and a sixty day improvement plan for the bonus run incident that warned Roche reserved the right to terminate the Documented Counseling and take further disciplinary action, up to and including termination, consistent with performance up to that date. (Filing No. 65-11 at 35.)

         On March 30, 2015, Smalley attached a rebuttal to the Documented Counseling with her concerns that she has told management several times that she had not been provided with adequate training. (Filing No. 65-11 at 39.) With regards to the bonus run incident she admitted to making some mistakes during the bonus cycle, but disputed that she was the cause of the duplicated payments issue discovered on March 12, 2015. Smalley believed the bonus run was processed incorrectly from the beginning due to the faulty advice she received from both Production Supervisor Lori Wright (“Wright”) to enter “employee numbers” and IT contractor Phil Coriveau to enter “p-numbers” over and over again-which resulted in double payments-when she should have been entering “payroll areas”. Smalley recalls that Heathcote told her “I think you are getting a raw deal and you are being thrown under the bus.” (Filing No. 65-1 at 5.)

         After the bonus incident, Smalley received two emails with positive feedback. On March 26, 2015, Production Team Lead Shaun Dauenhauer, sent Smalley an email stating,

HUGE WIN!!! WOOHOO for Stephanie!! She rocked this SM payroll!! Did an awesome job trouble shooting PHARMA issues last night, and then got the “P” numbers to us first thing this morning. This is awesome, especially after the crazy week of processing we have had. Thank you Stephanie for sticking with it!

(Filing No. 65-11 at 19). In mid-May 2015, Smalley received a hand-written note from Heathcote stating, “Stephanie, Thank you for your drive & dedication. You've been working so hard & I notice! I'm proud of you. Keep up the good work. Please use this card to treat yourself over at Building “K.” Leave an hour early one day and enjoy! Love, Wendy.” Id. at 22.

         Smalley was responsible for payroll of Roche's affiliate in Puerto Rico. She was required to process the Puerto Rico payroll by Wednesday of the payday week and notify Roche employees located in Puerto Rico of the completion, so that the payroll could be timely released to the Puerto Rican banks. The payroll had to be processed by Wednesday in order for employees to be paid on time by Friday of the pay week. (Filing No. 58 at 12.) Puerto Rican banks required two days to process bank files, therefore, failure to process the payroll by Wednesday could potentially result in late payments of wages owed to employees and legal penalties. Id.

         While the Documented Counseling was still in effect, Smalley failed to timely complete the Puerto Rico payroll during the week of May 18, 2015.[1] In addition to processing Puerto Rico's payroll by Wednesday during payroll weeks, Smalley was required to send an email to the local Puerto Rico Roche employees that payroll was processed and ready to be released to Puerto Rican banks. She was also required to copy Heathcote and Wright on the email. Smalley prepared the payroll a day late, on Thursday, and failed to copy Heathcote and Wright as she had done in the past. As a result, Puerto Rico's Human Resources employee, Mayra Lopez, received numerous telephone calls and complaints from Roche's employees in Puerto Rico who did not receive their paychecks on time. Based on these calls, Heathcote discovered that Smalley failed to submit the payroll on time. Smalley's response was that “it was a busy week and she apparently thought Thursday was Wednesday, ” and that she did not think it was a big deal to not copy Heathcote and Wright on the confirmation email that went to Puerto Rico. (Filing No. 58 at 22-23.) After this error, Smalley was terminated on June 1, ...

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