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Housekeeping director fired lawfully based on fraudulent timecard scheme uncovered while on FMLA leave

By Marjorie Johnson, J.D.

A hotel’s executive housekeeper, who was terminated shortly after returning from FMLA leave based on revelations in an internal wage-hour investigation that she had been overseeing a scheme of rounding housekeepers hours down to avoid paying overtime and increase her potential for a bonus, failed to revive her claims that she was fired because of her age, in retaliation for her truthful deposition testimony in previous litigation, for taking FMLA leave, and for opposing discriminatory practices. Because she failed to present evidence of bias or retaliation and couldn’t refute the hotel’s explanation for firing her as pretextual, the Eighth Circuit affirmed the district court’s dismissal of her claims on summary judgment (Naguib v. Trimark Hotel Corp., September 11, 2018, Smith, L.).

Oversaw staff, payroll. The executive housekeeper ran the housekeeping department at Millennium Hotel in Minneapolis, a Trimark Hotel Corporation, since 1977. In that role, she oversaw roughly 50 housekeepers and managed payroll for the department. She was also eligible for an annual one percent bonus tied to minimizing employee payroll.

Events leading to discharge. In her lawsuit, she blamed her firing on a series of incidents that had occurred over the prior three years. First, in 2011 she testified during a deposition that the hotel had used a certain cleaning standard that the hotel’s current general manager had denied using. The company ended up settling that lawsuit for $20 million, though it was not clear that her testimony played any role in that settlement.

In April 2013, as general manager was leaving his post, he sent an e-mail to his replacement asking whether she was “taking control” of the plaintiff. About a year later, the new general manager allegedly told the plaintiff, “you’ll probably never retire, we’ll be carrying you out . . . in a box.” She also purportedly directed her to tell her Muslim employees to get notes from their mosques saying they could wear head scarves to work.

Around the same time, the hotel also stopped allowing the plaintiff to roll over her vacation hours from one year to the next. As a result, she was forced to take vacation days starting October 21. She was subsequently granted her request for FMLA leave for hypertension beginning on October 30 but was suspended and fired her shortly after her return.

Investigation into timekeeping practices. Though she claimed these incidents showed that her firing was motived by unlawful animus, the hotel argued that its actions were solely related to misconduct that it had discovered shortly after she began taking her mandatory vacation days in October 2014. Her temporary replacement soon noticed timekeeping irregularities, such as observing that housekeepers had routinely punched out after their scheduled work hours but then wrote in a lower hour total on their sign-in sheet. When he asked them about this practice, they told him that the plaintiff had told them they were not allowed to list overtime hours on the handwritten sheets. She then apparently manually overrode punch clock times and entered the shifts reflected on the handwritten sheets.

As the hotel further investigated, multiple employees reported that the plaintiff had told them not to list overtime hours. The investigation also revealed that housekeeping had by far the most punch time edits of other hotel department. The hotel also discovered that a housekeeper was regularly sewing hotel linens at home after eight-hour workdays and not receiving overtime pay.

No direct evidence of retaliation. The plaintiff failed to revive her retaliation claims under the state whistleblower law, common law, and the Minnesota Human Rights Act (MHRA). First, there was no direct evidence that she was retaliated against because of her deposition testimony. Significantly, she wasn’t fired until three years later and the general manager who had disagreed with her at the time was no longer her boss.

There was also no direct evidence of retaliation for opposing the new general manager’s directive to obtain notes from Muslim employees to allow them to wear head scarves. The hotel never instituted that policy and had a policy in place that allowed for religious attire. Moreover, she merely responded by saying she would not ask for notes until a company policy was officially rolled out.

No pretext. She also failed to refute the hotel’s clearly shown legitimate non-retaliatory reason for firing her: an internal investigation that credibly exposed that she regularly altered employee hours without using a company-sanctioned form. Indeed, the timing of her termination supported the notion that it was not retaliatory since the hotel was only able to discover the time sheet practice because someone had taken over her duties while she was away. Within one month, and after a hotel-wide internal wage-hour investigation, she was fired. The investigation also resulted in discipline for three other managers who engaged in similar conduct on a smaller scale and the hotel compensated its employees for unpaid overtime discovered in the investigation.

No age bias or FMLA retaliation. Summary judgment was also properly granted as to her age bias and FMLA retaliation claims. She pointed only to a stray remark from the new general manager that occurred months before the wage-hour investigation that led to her termination. Moreover, she applied for FMLA leave one day after her temporary replacement had flagged wage-hour irregularities that would eventually lead to the investigation and her termination. reasons. There was also simply no evidence suggesting pretext.