By: Claire Sweetman
Ninth Circuit Clarifies Importance of Workplace Investigations
On February 26, 2025, the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”) reversed the ruling of the lower court and revived the plaintiff’s claim in the case of Lui v. Dejoy.[1] Dawn Lui, a Chinese woman, worked for the U.S. Postal Service for almost thirty years when employees began raising concerns about her behavior. Employees complained that Lui engaged in angry and/or abusive behavior, and violated USPS rules about allowing non-employees in staff areas.[2] In response, Lui raised a complaint that, following her promotion to Postmaster of the Shelton, Washington Post Office, she had been “harassed, targeted, and the subject of false complaints based on her race, national origin, and sex.”[3]
Lui’s supervisor shared Lui’s concerns with the HR manager assigned to investigate the complaints raised against Lui.[4] The HR manager did not investigate Lui’s concerns.[5] Later, Lui was transferred to another location with a lower salary. She was demoted and replaced by a white male. Lui appealed her internal complaint to Karen Bacon, the Tacoma Postmaster. Bacon’s investigation consisted of documentary review of HR’s demotion decision and written complaints by other employees about Lui’s behavior.[6] Bacon affirmed the demotion. Lui then filed a formal complaint with the Equal Employment Opportunity Commission (EEOC) and then a lawsuit against USPS, claiming she was treated differently based on her race, national origin, and gender in violation of Title VII.[7]
The lower court granted USPS’s summary judgment motion, reasoning that Lui had not made an adequate prima facie case of discrimination. Additionally, the court ruled that Bacon’s “investigation” consisting of just document review was sufficient to articulate a legitimate non-discriminatory reason for Lui’s demotion.[8]
The Ninth Circuit reversed the lower court’s decision, reviving Lui’s original discrimination complaint.[9] In doing so, the court reasoned that Lui had made an adequate prima facie case by proving that she was qualified for the position, demoted, and then replaced by someone not in her protected class.[10] The Ninth Circuit also ruled that USPS’s internal investigation did not establish a legitimate non-discriminatory reason for Lui’s demotion due to concerns regarding the independence and impartiality of the investigation.[11] The court stated that Bacon’s investigation into Lui’s appeal, which constituted only of documentary review, did not constitute an adequate investigation. Indeed, Bacon did not interview any of the complaining employees, despite Lui’s supervisor warning her that several of the employees were biased against Lui.[12] Therefore, Bacon was unable to conduct credibility assessments of the complaining witnesses, whose complaints were proffered as legitimate, non-discriminatory reasons for demotion Lui.[13] Additionally, Bacon did not investigate Lui’s original discrimination complaint at all.
In reversing the lower court’s decision and rejecting USPS’s argument that they had conducted an adequate internal investigation into Lui’s discrimination complaint, the Ninth Circuit highlighted the importance of conducting unbiased and thorough investigations.
Colorado Predicted to Expand FAMLI Act
The Colorado state legislature voted in April 2025 to expand its paid family and medical leave program (FAMLI Act) to include an additional twelve weeks of paid leave for parents with a baby in the Neonatal Intensive Care Unit (NICU).[14] The bill, which was approved by the legislature, will now go to Colorado Governor Jared Polis for his signature or veto.
[1] https://cdn.ca9.uscourts.gov/datastore/opinions/2025/02/26/23-35378.pdf
[2] https://www.employers.org/blog/2025/03/20/default/ninth-circuit-clarification-highlights-the-importance-of-workplace-investigations/
[3] Id.
[4] Id.
[5] Id.
[6] https://www.callaborlaw.com/entry/employee-replaced-by-white-male-coupled-with-employers-poor-investigation-fuels-disparate-treatment-claim
[7] Id.
[8] https://www.employers.org/blog/2025/03/20/default/ninth-circuit-clarification-highlights-the-importance-of-workplace-investigations/
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] Id.
[14] https://www.abetterbalance.org/colorado-expands-paid-family-and-medical-leave-for-nicu-parents/#:~:text=The%20Colorado%20State%20Legislature%20voted,a%20baby%20in%20the%20NICU.