Labor & Employment Law Daily Wrap Up, DISCRIMINATION—RACE—S.D.N.Y.: Comparator evidence bolsters Black director’s claim firing for retaliation against white contractor was discriminatory, (Jan 31, 2025)

By Marjorie Johnson, J.D.

Two white managers knew the director’s request that the contractor be terminated was connected to his claim the director made a racist remark, yet they were not disciplined despite their acquiescence and failure to intervene.

Merck will face trial on a former Black director’s claims under Section 1981 and the New York State Human Rights Law alleging the company discriminated against him based on his race when it fired him for allegedly orchestrating the termination of a white contractor in retaliation for the contractor’s complaint the director said he preferred “chocolate cake to white cake,” but did not take any disciplinary action against two white managers to whom the contractor had brought his concerns. Denying Merck’s motion for summary judgment, a federal district court explained that while a jury may find that the two white managers were not similarly situated because neither engaged in the same inappropriate behavior as the director, a reasonable jury could also conclude they both similarly retaliated against the contractor by acceding to the director’s request to terminate his contract but suffered no consequences (Davis v. Merck & Co., No. 7:22-cv-09501-VB (S.D.N.Y. Jan. 29, 2025)).

No hiring/firing power. In early 2020, Merck hired the employee as a director of compliance and risk management. Though he oversaw 25 team members, he was not authorized to hire or fire subordinates or consultants without the approval of his manager, a white executive director (ED).

Oversees white contractor. In September 2021, Merck retained a white contractor to work on the employee’s security project. A white associate director (AD) managed the contractor’s contract while the employee oversaw his work and regularly met with him to discuss the project’s status.

Contractor reports “chocolate” remark. On January 26, 2022, the contractor complained to the ED that the employee had subjected him to “offensive” behavior and “screaming fits” during meetings and made “an overtly racist statement” when he said he “preferred chocolate cake to vanilla cake” as an explanation for his management style. The ED thereafter advised the employee that the contractor had expressed concerns about him and urged him to reach out to him. The employee messaged him but received no response.

Employee requests contractor’s firing. That same day, the AD advised the employee that the contractor had complained about his “chocolate” comment and intended to raise that complaint to the ED. The employee felt this was a “betrayal of trust” since the contractor did not come to him directly. The next morning, he instructed the AD to remove the contractor from the project. The AD did so and requested that his access to his Merck account be shut down.

White supervisor doesn’t intervene. Also on January 27, the employee advised the ED that he terminated the contractor “based on info I received last night.... He was apparently a disgruntled contractor.” The ED told him he wished he had not done so because they “could have had a conversation prior to doing that,” but did not order him to rescind the action or otherwise intervene.

Investigation leads to termination. The contractor complained, and a nine-month internal investigation by Merck’s office of ethics (OOE) ensued. The OOE investigator ultimately recommended the employee’s termination based on her conclusion that he violated Merck’s policies mandating cooperation with internal investigations and prohibiting retaliation. The ED and his manager were “surprised” and elevated the decision, but senior executives agreed the employee retaliated against the contractor and, in September 2022, he was terminated.

The OOE investigator based her recommendation on several factual findings. In particular, she determined the employee made the “chocolate and vanilla” comment even though he claimed the contractor made the comment and the ED confirmed the employee told him the contractor made the comment. The investigator also concluded that the employee asked the AD to terminate the contractor’s contract “in part” because he “intended to go to” the ED with his concerns rather than speaking to him directly. She also noted that both the AD and ED stated they were not aware of any issues with the contractor’s performance, but did not investigate either of them for potential misconduct.

Comparator evidence suggests bias. Rejecting the employer’s contention that the employee could not make out his McDonnell Douglas prima facie case or demonstrate pretext, the court found that a triable issue existed as to whether the AD and the ED were similarly situated to him and were treated more favorably. The two white men were subject to the same workplace standards, including the anti-retaliation policy, and were aware that the employee’s termination request was connected to the contractor’s complaints against him.

Not merely “bystanders.” A reasonable jury could also conclude they were “not merely bystanders but engaged in conduct similar to plaintiff,” explained the court. First, the AD managed the contractor’s contract and executed the termination upon the employee’s request. Second, the ED was the employee’s supervisor and was informed of his decision to terminate the contractor’s contract within hours, but did not intervene or even question that decision. A reasonable jury could conclude both had the power to stay, if not reverse, the termination of the contractor’s contract if they felt the decision was the result of wrongful retaliation. The fact that they all occupied different positions within the company did not preclude a finding that they were similarly situated.

Though the employer argued that the two white men were not similarly situated because neither engaged in the same inappropriate behavior as the employee, a reasonable jury could conclude they both similarly retaliated against the contractor by acceding to the employee’s request to terminate his contract. While a jury could also find that the employee engaged in different conduct because he alone requested the termination of the contractor’s contract in response to a complaint targeting him, “these contrasting reasonable inferences create an issue of fact.”

Affirmative defenses. Finally, the court rejected the employer’s bid for summary judgment as the employer’s affirmative defenses regarding attorneys’ fees and punitive damages. Deciding either issue at the summary judgment stage would be premature and inappropriate.

The case is No. 7:22-cv-09501-VB.

Judge: Briccetti, V.

Attorneys: Jonathan Robert Goldman (Goldman Law) for Richard Einstein Davis. Tracey Salmon-Smith (Faegre Drinker Biddle & Reath) for Merck & Co.

Companies: Merck & Co.; Merck Sharp & Dohme LLC

Cases: RaceDiscrimination Discrimination Discharge AttorneysFees RemediesDamages NewYorkNews