5th Circuit Rules HR’s Discrimination Investigation Is Admissible Evidence

Is an HR investigation into discrimination admissible evidence? A recent case from the U.S. 5th Circuit Court of Appeals (the federal appeals court covering Texas) declares the answer is “yes.” But as the expression goes, the devil is in the details. Read on.

Claim of No Service Because of Race

Sharnez Hager and her family (all of them African Americans) went to a Chili’s restaurant operated by Brinker Texas, Incorporated, and were allegedly denied service because of their race. She filed a lawsuit under Section 1981 of the Civil Rights Act of 1866.

But before she filed suit, she complained to Brinker about the no-service incident. As a result, a mere four days after the incident, Brinker sent HR investigator Tristan Venable to look into it. According to his report, the restaurant hostess didn’t seat Hager and her party because of a staff shortage combined with a customer rush, not because of race. He summarized his conclusions in an email to the company shortly after wrapping up his investigation.

The trial court dismissed the lawsuit because Hager couldn’t show Venable’s report was arguably false. The question on appeal was whether the report was admissible under the rules of evidence. By a 2-to-1 vote, the appeals court said, “Come on in!”

Why Admissible?

Hager argued the report was hearsay and thus inadmissible. But there are exceptions, and here’s one: a report “made at or near the time” of the incident (check!) from “information transmitted by someone with knowledge” (check, as well—that was Venable!) and made in the normal course of business (check, per testimony from Brinker).

Hager essentially said, Hold on! You investigated only because, when I complained, I also threatened to sue you! So, you prepared the report in anticipation of litigation and were incentivized to shade the truth. That motivation makes the report inadmissible.

The majority of the appeals court panel thought otherwise. It reasoned that an individual’s “threat of litigation cannot automatically disqualify legitimate records that a business would have created and collected regardless of the threat. Otherwise, would-be plaintiffs would be rewarded for early escalation of disputes by leaving businesses with hampered means to defend themselves should a lawsuit actually materialize.” The report comes in. Hager v. Brinker Texas, Incorporated (5th Cir., 2024).

Bottom Line

The case was reinstated, however. Allegedly, the hostess who didn’t seat Hager and her party told them, “I apologize for discriminating against you.” The hostess made this comment at a meeting between Hager, upper-level Brinker employees, and lawyers for Brinker. Given this context, all three judges agreed a jury needed to hear the evidence and decide if the law was violated.

The lesson for you: Make sure all complaints of unlawful discrimination—by employees, customers, or clients—are investigated to find the truth and to make an honest recommendation. That way, you’ll ensure you can use the hearsay exception for business records that are kept in the normal course of business.

Michael P. Maslanka is a professor at the UNT-Dallas College of Law. You can reach him at michael.maslanka@untdallas.edu.

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