In an unpublished opinion, the 6th U.S. Circuit Court of Appeals has held that an employee’s appraisal score, given during a Reduction in Force (RIF) review, that was significantly lower than an annual performance review score given only 20 days earlier might support a jury’s finding that the true reason for the employee’s layoff was her requested FMLA leave. Cutcher v. Kmart Corporation, 6th Circuit, No. 09-1145, February 1, 2010.

Susan Cutcher was initially hired by Kmart as a part-time employee in 1984, and eventually moved to a “full-time hourly associate” (FTHA) position. Kmart regular conducts performance appraisals of its employees on or around the anniversary date of their hiring. Between 2001 and 2003, Cutcher was rated as “exceptional” by her supervisor. In 2004, Cutcher’s rating dropped to “exceeds expectations” which was the second highest possible rating, with a total numerical score of 20 out of 22. On November 15, 2005, Cutcher again was rated as “exceeds expectation” with a rating of 18 out of 22.

In early November 2005, Cutcher submitted FMLA forms to her HR representative, informing the company that she would be off work for six weeks after undergoing surgery. At the same time, Cutcher completed forms for short-term disability leave, and commenced paid leave effective December 5, 2005.

On December 21, 2005, the company announced a nation-wide RIF, within which Cutcher’s location ultimately laid off six FTHAs. The RIF guidelines required each store to complete an Associate Performance Recap form for each FTHA. That form included the same categories as did the annual performance evaluation review, and considered the employee’s most recent appraisal rating in calculating the employee’s score for purposes of the RIF. The form’s instructions also required an explanation if there was a significant change in the RIF score as compared to the employee’s annual appraisal.

Although Cutcher’s pre-RIF annual evaluation was enough to avoid layoff, her performance was re-evaluated, and that score placed her close to the bottom of the rankings. On her RIF evaluation, in a “comment” section net to her name, Cutcher was noted as “Poor customer and associate relations. LOA.” The store’s manager indicated that “LOA” simply indicated that Cutcher was on a Leave of Absence at the time of the RIF evaluation, and that her layoff would be delayed until her return. Cutcher, in fact, was terminated upon her return from leave on January 23, 2006, and her position ws given to another FTHA who received a higher ranking.

Cutcher filed suit in federal court, claiming interference with, and termination in retaliation of, her FMLA leave. Although the district court granted Kmart’s motion for summary judgment, the Sixth Circuit reversed that decision, holding that the fact that there had been no prior complaints against Cutcher, and that an “LOA” note had been written next to her name created issues of material fact for the jury as to the reason for her RIF rating score.

The real issue in this case is the lack of documentation for the company’s reasons for the RIF ranking. While the company argued that Cutcher’s performance had been declining, there was no documentation evidencing a prior concern about that performance. While the individual who conducted Cutcher’s annual review in early November testified that she “often scored associates higher on annual appraisals than they deserved” because she “did not like confrontation,” she also admitted that she was not aware of any specific problems with Cutcher’s performance between the annual evaluation and the RIF ranking.

Employers must recognize that, when it comes to performance evaluation, honesty really is the best policy. Had the supervisor been more direct in her evaluation of Cutcher and documented a declining performance, such documentation would have eliminated the basis of Cutcher’s FMLA claim by supporting the company’s reason for the lower RIF ranking. Supervisors and managers should be trained to use performance evaluations as constructive feedback, and not as motivational tools or anticipatory rewards.