Labor & Employment Law Daily Wrap Up, DISCRIMINATION—RACE—8th Cir.: Fired Native American failed to show RIF was pretext, (Aug 11, 2026)

By Tulay Turan, J.D.

She was one of the only employees whose salary was primarily funded by internal money.

Affirming a district court’s grant of summary judgment on an employee’s Title VII race discrimination and state-law race and national origin claims, the Eighth Circuit held she failed to show that her termination pursuant to a reduction in force was pretext for discrimination. The court found no evidence that race, rather than the employer’s stated budgetary constraints, motivated the decision (Tobacco v. Avera McKennan, dba Avera Research Institute, No. 25-2881 (8th Cir. Aug. 10, 2026)).

In 2017, Avera Research Institute’s (ARI) chief clinical research officer recruited the employee, a Native American, as a clinical research manager to work in its Pine Ridge office on health studies for underserved populations, particularly Native Americans. The employee, whose salary was funded with internal money, supervised one full-time research assistant, who was also Native American. The salaries of two other managers at ARI’s offices in Rapid City and Sioux Falls were paid primarily from grant funds.

Participants for study. In 2020, the employee and her assistant were assigned to the Systems of Native Community Health (SYNCH) study. They went door to door to recruit participants from Pine Ridge and Rapid City. The research manager for Rapid City initially was the lead on the study, but the employee replaced her as lead in 2022. As lead, she prioritized recruitment and directed two research assistants to conduct door-to-door recruitment in Rapid City. They expressed concern about their safety because the city had experienced forms of violence. Thereafter, ARI implemented an alternative video-recruitment method.

Discrimination discussions. Also in 2022, the employee discussed race discrimination issues with the SYNCH study’s director. They talked about “systemic race discrimination against Native people in Rapid City, weak efforts at DEI training, and their respective personal struggles with how to talk about race discrimination in the SYNCH team setting.” They also discussed “discriminatory microaggressions,” and the employee told the director she found the ARI workplace difficult.

The director testified she interpreted the employee’s statements about discrimination as limited to the context of ARI’s research. The director believed the employee was discussing systemic racism, not discrimination against her at ARI. The director did not report this discussion to HR.

Budget cuts. On June 1, Avera’s CEO mandated that department leaders improve their respective budgets by 5 percent. To meet the budget improvement, the chief research officer decided to eliminate the employee’s position as part of a reduction in force (RIF). The officer recommended the termination to her supervisor, ARI’s vice president, who approved it. She admitted she did not know specifically how much money was needed to reduce ARI’s budget by 5 percent but testified that the VP determined the RIF met the budget requirement. She also admitted that she did not review Avera’s RIF policy.

Complaints to HR. Also in early June, the employee emailed an HR representative, alleging she was being retaliated against and faced resistance in her recruitment plan in the Rapid City office. She met with the representative a few days after the email and complained about unfair workloads, dismissive conduct, and isolation in the SYNCH team. A few days after that, the HR representative told her that, based on the evidence the employee and her leadership had provided, no retaliation had taken place.

Termination, complaint. In July 2022, ARI terminated the employee pursuant to the RIF. Thereafter, she sued Avera, alleging one count of race discrimination in violation of Title VII and one count of race and national origin discrimination in violation of the South Dakota Human Relations Act. The district court granted Avera’s motion for summary judgment, finding the employee failed to establish a prima facie case of retaliation and failed to show the RIF was a pretext for discrimination. The employee filed this appeal.

No pretext. Affirming the district court’s grant of summary judgment in ARI’s favor, the appeals court found the employee failed to show the RIF was pretext for discrimination. The court assumed without deciding that she presented a prima facie case of race discrimination and found ARI articulated a legitimate, nondiscriminatory reason for her termination, namely, the need to improve the budget by 5 percent. The chief research officer reasoned that terminating her was the best way to do that. Most of ARI’s budget came from grants, meaning increasing the revenue by 5 percent was not feasible. She was one of the only employees at ARI whose salary was primarily funded by internal money. She also managed only one person at a location with few grant dollars. For these reasons, the court said, ARI met its burden of showing a legitimate, nondiscriminatory reason for her termination.

The court then addressed the employee’s various arguments that the RIF was pretext for discrimination, rejecting each in turn.

Failure to follow RIF policy. The employee’s first argument was that the chief research officer’s failure to follow Avera’s RIF policy showed that racial animus actually motivated the RIF. The employee pointed to the officer’s failure to conduct a budget analysis before selecting her for termination. The court found that the officer’s decision to focus solely on internal money without a cost-savings calculation may have been unsound. “Employers, however, ‘are free to make employment decisions based upon mistaken evaluations, personal conflicts between employees, or even unsound business practices,’” the court wrote. On this record, the court did not believe a reasonable jury could find that a causal connection existed between the officer’s policy violations and the employee’s race.

Likewise, the employee’s arguments about the officer’s failure to consult the selection criteria, ask for volunteers, or use her discretion to increase ARI’s revenue similarly failed. These were business decisions based on reducing internal money to meet budgetary constraints. The employee failed to connect these decisions to racial animus, the court said.

Hiring during RIF. The court also rejected the employee’s argument that ARI’s hiring for three full-time positions during the RIF showed pretext. The positions were fully grant funded, paid less than she was making, and were not at Pine Ridge. The chief officer and HR representative viewed them as demotions for the employee. Although she may have been qualified for those positions, the court said it would not second guess ARI’s business decision to provide her severance instead of a demotion.

“Racialized environment.” The employee also argued that ARI’s “racialized environment” proved racial animus actually motivated ARI’s RIF. She pointed to racism being discussed at ARI, two employees’ acknowledgements of the discrimination against Native Americans participating in the SYNCH study, and the chief research officer’s denial of her request to lead another study, labeling her Native American heritage as a conflict of interest. She acknowledged that ARI’s studies involved discussions of “systemic racism or community racism.” However, she failed to explain how these discussions and acknowledgements were connected to her termination, particularly since the record showed neither of the two employees had a role in her RIF decision, the court said. She also failed to connect the conflict-of-interest determination to her termination. No reasonable jury, the court said, could find these incidents motivated the employee’s termination.

Not similarly situated. Next, the employee argued she was treated differently than non-Native American employees. The court found the three employees she mentioned as possible comparators were not similarly situated. Two of them were part-time research assistants while she was full-time. Although the third employee also was a clinical research manager, she had a different supervisor, supervised more employees, managed a different office, was involved in projects with future grant-funding, and had a grant-funded salary. Thus, the employee could not show she was similarly situated in all relevant aspects with the three employees.

No disparate treatment. Importantly, the court noted, the employee could not show disparate treatment. She did not complain about her safety when recruiting subjects for the study. She chose to continue recruiting door-to-door in the face of rising violence in Rapid City. This was not evidence of discrimination, the court found. She provided no evidence showing race motivated ARI’s employees’ actions or inactions for the SYNCH study. No reasonable jury could find that ARI’s shift away from door-to-door recruitment in Rapid City showed that racial animus more likely motived the RIF.

Failed to follow discrimination policies. The court also rejected the employee’s contention that ARI’s failure to follow the company’s discrimination policies supported an inference that the RIF was pretext. She claimed that HR did not legitimately investigate her complaints about the research assistants, the unfair distribution of labor, or discrimination. She also claimed the Rapid City research manager did not relay the assistants’ tokenization comment to HR and that the SYNCH study’s director failed to report her discrimination complaints. The court found she failed to show a causal connection between these alleged violations and the research officer’s decision to terminate her.

No retaliation claim. Finally, the employee attempted to make two arguments related to retaliation, but the court found she had not raised a retaliation claim. Even if she had, the timing alone between her discrimination complaints and her termination was insufficient to prove pretext.

Thus, the court concluded nothing in all the facts showed the RIF was more likely motivated by race than by its proffered justification. Accordingly, the court affirmed the district court’s grant of summary judgment to Avera.

The case is No. 25-2881.

Judge: Benton, D.

Attorneys: Gavin D. Pochop (Johnson Pochop Law Office) for Deborah A. Tobacco. David J. Hieb (Boyce Law Firm) for Avera McKennan dba Avera Research Institute.

Companies: Avera McKennan; Avera Research Institute

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