A Texas Nonprofit is sued for Sex and Disability Discrimination, Retaliation, and Violations of TX Labor Laws
Background:
This case involves a nonprofit organization that provides mental health services including Peer Specialist support. Peer support is a service provided by employees who have been diagnosed with a mental health condition, are in recovery from it and have completed a fairly short program which certifies them as Peer Support Specialists. By definition, any person certified to be a Peer Specialist also has a mental health disability which they are managing through various recovery methods and possibly also medication. Peer Specialist teams present employers with unique and complex challenges as the employees often have limited work experience, and the employees’ recovery journey may be prone to setbacks depending on where they are in their recovery journey. These personal challenges are then coupled with the billing pressures due to Medicaid’s low reimbursement rates in a fee-for-service setting and mandated compliance with an often complex regulatory framework governing services and billing integrity. Needless to say, these are not easy programs to maintain for human services providers.
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Alleged Wrongdoing:
Sex Discrimination: The Plaintiff, CM, a female, was hired as a Peer Support Specialist in 2020 at an annual salary of $30,000. Approximately one year later, the nonprofit hired a male Peer Support Specialist at CM’s recommendation, and paid him $8000 more per year than they paid CM although he did not have as many certifications nor as much experience for the position as CM did. The employer then passed CM over for promotion instead promoted CM into a senior position.
Disability Discrimination: CM suffered from a stroke in 2024 which resulted in a 4-day hospitalization and physical and cognitive limitations including a limp, and heightened anxiety and fatigue. The employer granted CM leave for almost 4 weeks but during her leave, CM alleges her supervisor repeatedly pressured her to return to work, which she did. Upon returning to work, CM discovered that her nondisabled male coworker had been promoted over her and allegedly excluded from staff meetings, allegedly prevented from acquiring new clients and faced increased scrutiny.
Unlawful Retaliation: In February 2025, CM reported the above discriminatory treatment to her employer’s CHRO who allegedly dismissed CM’s claims and took no remedial action. The following month, CM was accused of policy violations. CM immediately complained to the CHRO that she was being targeted for making her earlier complaint and allegedly the CHRO told her to resign or face termination.
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HR Compliance Analysis
This sequence of events often shows up in lawsuits for unlawful employment practices. In a nutshell, a person engages in protected activity (seeking a reasonable accommodation, complaining about sex-based discrimination in this fact pattern), a few days or weeks later they are terminated or demoted or suffer some other adverse employment action. Lawyers love these scenarios because all they need to show is close temporal activity between the protected activity and the adverse employment action to strong-arm a settlement out of the defendant. Below are some basic guidelines that would have helped this nonprofit avoid this lawsuit:
Have standardized pay rates for every position allowing for increases based on seniority or other easily measurable criteria (e.g. degree or certification). This eliminates supervisors being able to adjust compensation rates because someone seems like a great hire or because they believe someone will accept less for the job. See our article on pay transparency laws.
Train all managers and supervisors on what they can and can’t do when an employee is on a protected leave (ADA or FMLA). Supervisors should not be permitted to have ANY contact with an employee on leave unless they involve experienced HR personnel in this contact. This avoids interference claims, limits possible retaliation claims, and eliminates ADA discrimination claims for failure to reasonably accommodate the employee. If you need assistance with training managers and supervisors on workplace best practices to reduce the risk of litigation, contact us to book a consultation.
If the allegations about the CHRO are true, this means that the employer had an unqualified employee in their most senior HR position. When your HR employees dismiss good faith complaints of unlawful workplace conduct, they are setting up the employer for a lawsuit. If you don’t have experienced HR personnel, consult your labor law counsel on any internal discrimination complaint or look for an experienced outsourced CHRO to support and train your HR personnel. I looked up the company’s CHRO and while she had leadership experience, she did not seem to have HR experience. Additionally she had been with the company for 20 years, meaning, she had likely formed working relationships with multiple staff members that may have affected her perception of the credibility of CM’s complaint. If you need the objective opinion of an experienced CHRO on a complex internal employee matter, see how our outsourced HR services can provide you with ongoing support and assistance.
If you are going to terminate an employee within 2-3 months of them engaging in protected activity, seek expert guidance on the matter either from counsel of from experienced internal or external HR personnel. These are almost always high-risk terminations, and you need to understand what the possible outcomes will be and the cost of addressing them. Sometimes, it’s just easier to wait a little longer before terminating. Other times, you want go back and revisit why you are terminating the person, and ensure that all reasons for the termination (not just the latest one) are included in the termination letter. If you need assistance with discipline or performance management contact us.
If you are a nonprofit or human services provider with HR challenges contact us to book a free consultation.
Please Note: In CHRO’s HR Compliance Corner we discuss recent federal court filings for unlawful employment practices and discuss various solutions that could have prevented the complaint. In this section, we treat the complaint allegations as true simply for the purpose of discussion, but readers should realize that the defendant has various defenses they will raise that may entirely undermine the allegations of unlawful conduct in the complaint. Thus, our commentary should not be taken as endorsement of the plaintiff’s position, only as a point of reference for discussion. Neither CHRO nor its officers or employees, have any affiliation or relationship with either the plaintiff or the defendant in any case discussed.
