September 3, 2010

RECENT AGE DISCRIMINATION RULINGS

by Art Gutman Ph.D., Professor, Florida Institute of Technology

Three recent age discrimination cases caught my attention, each for different reasons. One case was decided under California State law (Reid v. Google [50 Cal. 4th 512, 8/5/10]), and the other two were ADEA cases (Aliotta v. Bair [2010 U.S. App. LEXIS 16763, 8/13/10] & Jones v. Oklahoma City Public Schools [2010 U.S. App. LEXIS 17676, 8/24/10]).

In Reid v. Google, the California Supreme Court upheld a reversal of summary judgment that had favored Google. 54 year-old Reid was transferred from a director position to an in-house graduate training program by a 55 year-old Vice President (Rosing) a year after Rosing hired him. Rosing told Reid that he needed to adapt to Googles “culture”, which he characterized as having “younger contributors” and “inexperienced front-line managers”. Another executive and several co-workers were alleged to have made explicit ageist remarks. Reid was later fired by three major decision makers (the two Google co-founders and the CEO). The summary judgment was based on the “stray remarks doctrine” articulated by Justice O’Connor in Price Waterhouse v. Hopkins (1989). In Hopkins, O’Connor opined that remarks by “non-decisionmaking coworkers or ….. decisionmaking supervisors outside of the decisional process” should be insufficient to overcome summary judgment. However, the two higher courts ruled that California case law considers stray remarks “in totality with the other circumstances in the case” and has not “explicitly adopted or addressed the stray remarks doctrine.

In Aliotta v. Bair, the DC Circuit upheld summary judgment for the defendant on charges of adverse impact and disparate treatment in a reduction-in-force (RIF) at the FDIC. The adverse impact statistics were rejected because the plaintiffs combined older workers who were laid off with older workers who opted for FDIC’s voluntary early retirement plan. On the disparate treatment claim, the plaintiff’s claimed they faced a “Hobson’s Choice” between retirement and termination, but the court disagreed, ruling that employees were given months to decide, and were permitted to seek other jobs in the FDIC. The court also ruled that employers should not be discouraged from using voluntary early retirement plans that could mitigate or eliminate the need for RIFs.

In Jones v. Oklahoma City Public Schools (OKC), the 10th Circuit overturned a summary judgment for OKC. After her job was eliminated, Jones was reassigned from a higher-paying executive position to school principal. A comparable executive position was then created and filled by a substantially younger person. The district court judge ruled that Jones needed additional proof that age was a determining factor in order to survive summary judgment. The 10th Circuit called this “pretext plus” and reversed, ruling that Jones established a prima facie case under the McDonnell-Douglas disparate treatment framework, and it was OKC’s burden to articulate a nondiscriminatory reason for the re-assignment (thus permitting Jones to prove that the articulation is pretext). At issue here was Gross v. FBL (2009), where the Supreme Court ruled that ADEA disparate treatment claims require proof of but-for causation of age discrimination. OKC argued that but-for causation means “age must be the only factor”. The 10th Circuit disagreed and ruled that but-for causation permits other causal factors, as long as “age was the factor that made a difference.”

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