## Facts

- Tracey Lust worked as a successful sales representative for Sealy in Madison, Wisconsin, beginning in 1992, and was regarded highly by her supervisor, Scott Penters.
- In 2000, Sealy had an opening for a Chicago “Key Account Manager” position, which would have been a significant promotion; Lust had repeatedly expressed interest in becoming a Key Account Manager.
- Penters recommended Lust for the promotion, describing her as capable and ready.
- Sealy selected Loren Ek, a younger male employee who had not worked as a sales representative and whose experience was in customer service, marketing, and product management.
- After Lust complained about not being promoted, Sealy gave explanations that a jury could view as shifting and inconsistent, including asserted concerns about Lust’s interpersonal skills that were not reflected in performance evaluations and conflicted with Penters’s testimony.
- At trial, Sealy sought to introduce Penters’s post-meeting memoranda describing reasons for not promoting Lust and discussing possible future promotion; the district court excluded them as hearsay.

## Issues

1. Whether the evidence permitted a reasonable jury to find that Sealy’s failure to promote Lust was motivated by sex discrimination in violation of Title VII.
2. Whether the district court erred by excluding Penters’s memoranda as hearsay rather than admitting them under the business-records exception, Federal Rule of Evidence 803(6).

## Decision

- The Seventh Circuit affirmed the judgment for Lust.
- The court held the evidence was sufficient to support the jury’s finding of sex discrimination.
- The court held the district court acted within its discretion in excluding the memoranda because they did not qualify as admissible business records under Rule 803(6).
- The court left intact the district court’s application of the statutory cap, resulting in a total recovery of $300,000 plus $1,500 in back pay.

## Legal Principles

- On appeal from a jury verdict, courts do not reweigh credibility; once a plaintiff introduces some affirmative evidence supporting liability, the jury may disbelieve the employer’s contrary testimony, and there is no presumption that witnesses are truthful.
- In Title VII promotion cases, intentional discrimination may be inferred from comparative qualifications and evidence that the employer’s stated reasons are inconsistent, implausible, or not supported by contemporaneous documentation, permitting a finding of pretext.
- Under Federal Rule of Evidence 803(6), records are admissible as business records only if made and kept as part of a regularly conducted activity and the circumstances indicate trustworthiness; self-serving personnel memoranda prepared under circumstances suggesting anticipation of dispute or litigation may be excluded as untrustworthy hearsay.

## Conclusion

The Seventh Circuit affirmed a Title VII sex-discrimination promotion verdict because the jury could reasonably infer pretext from comparative qualifications and shifting explanations, and it upheld exclusion of internal supervisory memoranda where the circumstances of preparation undermined their reliability under Rule 803(6).


Lust v. Sealy, Inc., 383 F.3d 580 (7th Cir. 2004)