Leibowitz v. Cornell University
584 F.3d 487 (2009)
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Rule of Law:
An employer's decision not to renew an employment contract constitutes an adverse employment action under Title VII and the Age Discrimination in Employment Act (ADEA) when an employee seeks renewal.
Facts:
- Margaret Sipser Leibowitz began working for Cornell University's ILR School in 1983 as an Extension Associate and was later promoted to Senior Extension Associate II.
- Her employment was governed by a series of five-year term contracts, with appointment letters explicitly stating the employment was for a finite term.
- Prior to Leibowitz, Cornell had never failed to renew the contract of a Senior Extension Associate II without cause.
- In 2001-2002, Leibowitz had several discussions with Dean Edward J. Lawler regarding reimbursement for her travel expenses, which the Dean characterized as 'demanding' and 'pushy'.
- In June 2002, Dean Lawler informed Leibowitz, then 51 years old, that her contract would not be renewed upon its expiration, citing budgetary exigencies and the expense of her travel arrangement.
- Following the non-renewal decision, Thomas Germano, Director of the Long Island office, expressed eagerness to hire Leibowitz for a position, but this was not considered by the administration.
- When Germano later made a formal offer to Leibowitz for a position vacated by a younger male employee, Dean Lawler terminated Germano for making the unauthorized offer.
- During the period of purported budgetary concerns, the ILR School laid off six employees, all of whom were women over 50, while hiring twelve new, younger employees and reassigning many of Leibowitz's duties to male faculty members.
Procedural Posture:
- Margaret Sipser Leibowitz filed a complaint in the U.S. District Court for the Southern District of New York, alleging gender and age discrimination against Cornell University.
- The defendants moved to dismiss the complaint for failure to state a claim under Rule 12(b)(6).
- The district court granted the defendants' motion, concluding that the non-renewal of a term contract was not an adverse employment action.
- Leibowitz (appellant) appealed to the U.S. Court of Appeals for the Second Circuit, which reversed the dismissal and remanded the case.
- On remand and after discovery, the defendants moved for summary judgment.
- The district court granted summary judgment for the defendants, again finding that Leibowitz failed to show an adverse employment action and, alternatively, failed to show the defendants' reason was pretextual.
- Leibowitz (appellant) appealed the grant of summary judgment to the U.S. Court of Appeals for the Second Circuit.
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Issue:
Does an employer's decision not to renew an employee's fixed-term contract constitute an 'adverse employment action' for the purposes of establishing a prima facie case of discrimination under Title VII and the ADEA, even if the employee had no contractual right to renewal?
Opinions:
Majority - Bianco, District Judge
Yes, an employer's decision not to renew an employee's fixed-term contract constitutes an 'adverse employment action.' The court held that employees on term contracts seeking renewal are entitled to the same statutory protections against discrimination as prospective employees seeking to be hired. To hold otherwise would create a loophole allowing employers to make discriminatory non-renewal decisions without consequence. The court reasoned that the simple denial of an employment opportunity is sufficient to be considered 'adverse,' regardless of whether the employee had a contractual right to continued employment. Furthermore, Leibowitz presented sufficient evidence to create an inference of discrimination, including the fact that all six laid-off employees were women over 50, her duties were reassigned to men, and she was not considered for vacant positions offered to younger men. This evidence, combined with facts suggesting the university's budgetary concerns were pretextual, was sufficient for the case to proceed to a jury.
Analysis:
This decision significantly clarifies that the non-renewal of a fixed-term contract is an adverse employment action, thereby extending the full protection of Title VII and the ADEA to employees in such positions. It prevents employers from using the expiration of a contract as a shield for discriminatory animus, treating non-renewal as functionally equivalent to a refusal to hire. This precedent lowers the initial hurdle for plaintiffs in non-renewal cases, shifting the focus of litigation from whether an adverse action occurred to whether the employer's stated reason for non-renewal was a pretext for discrimination. The ruling ensures that the substantive protections of anti-discrimination laws are not circumvented by the form of the employment relationship.
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