On Monday, the Sixth Circuit affirmed the dismissal of an
age discrimination claim brought by a salesman who was terminated after he
refused to resign following the hire of (younger and higher
paid) salesmen as he had requested. Treadway v.
California Products Corp., No. 15-5718
(Aug. 1, 2016). The Court rejected the
plaintiff’s argument that he proved direct evidence of discrimination by repeated
references to his retirement or semi-retirement because those comments were not
connected to his age but were related to his request to “slow down” and reassign
most of his territory. “The terms
“retire” and “retirement” alone, without any evidence that they are being used as
a proxy for age to express discriminatory bias, are not direct evidence of age
discrimination.“ Further, the Court rejected the plaintiff’s argument that the
employer’s explanation for terminating his employment – to save money by
allocating his minor remaining responsibilities – was pretextual. While
the employer’s decision might have been unfair and/or unwise, it was honestly held
and not completely unworthy of belief.
Indeed, the Court concluded that the plaintiff himself was responsible
for initiating the chain of events by asking to slow down, by seeking reassignment of most of
his territory, and frequently inquiring when his replacement would be hired
and that he only changed his mind when his new employer ultimately decided not to
retain him as an independent contractor for his local and Bahamas territories.
According to the Court’s opinion, when the plaintiff was 66
years old, he requested to slow down and reduce his multi-state sales territory
to eliminate most travel. After
discussions with his supervisor, it was decided to hire new salesmen to assume
most of his duties and he would be limited to the area within 40 miles of his
home and the Bahamas. His supervisor
assumed that he would retire by the end of 2009 based on their discussion, but
the plaintiff denied ever expressing an interest in retirement. While he was the oldest salesman in the
company, all of the other salesmen were over 49 and most of them were over 60. Initially, two other salesmen would lose their
territories, which the plaintiff and another salesman would assume (as extra work), then new
salesmen would be hired to take these territories and most of the plaintiff’s
former territories. At that point, the
plaintiff would become an independent sales agent, lose his $48k/year salary
and be paid strictly on commission, to be re-evaluated annually. Some months later, the employer was acquired by the defendant company. Plaintiff was told to be patient while the new company evaluated its needs and options, so no one was hired to assume his newly expanded territory as had been contemplated a few months earlier. His supervisor requested that the new company make plans to replace the plaintiff based on his impending retirement. The plaintiff saw and never objected to the plan which mentioned his impending retirement, but no replacements were hired for more than two years and his salary remained unchanged. The plaintiff continued to call his supervisor inquiring about the hiring of a replacement because he was stretched thin over four states.
Finally, near the end of 2011, the defendant hired a new salesman to assume most of his territory. He was 57, had prior industry and marketing experience and was paid $70K/year ($22k/year more than the plaintiff). The rest of the plaintiff’s duties were assigned to existing and younger salesmen. (Another younger and better paid salesman was hired the following year and was given some of the plaintiff’s former accounts). The defendant refused to retain the plaintiff as an independent sales agent paid only through commission because it did not want to pay his travel expenses to the Bahamas when it could have a full-time employee assigned to that territory. His supervisor tried again to convince the defendant to retain the plaintiff in some capacity, but was unsuccessful. When the plaintiff learned that his services were no longer desired in any capacity, he refused to resign or retire as they had originally discussed. The defendant then sent him a notice notifying him of his retirement and, when he objected, eliminated his position.
The Court rejected the argument that the plaintiff had produced direct evidence of age discrimination by the frequent references to his impending and constantly delayed retirement because there was no connection between the discussion of his retirement and his age. In fact, he admitted that no one ever referenced his age at any time. Simply being the oldest salesman and his speculation could not constitute evidence of age discrimination.
Direct evidence requires no inference to prove the existence
of a fact while circumstantial evidence “is proof that does not on its face
establish discriminatory animus, but does allow a factfinder to draw a reasonable
inference that discrimination occurred.” . . .In the context of age discrimination,
“‘[o]nly the most blatant remarks, whose intent could be nothing other than to
discriminate on the basis of age,’ satisfy this criter[ion].”
. . .
The terms “retire” and “retirement” alone, without any
evidence that they are being used as a proxy for age to express discriminatory
bias, are not direct evidence of age discrimination.
The Court also rejected the plaintiff’s argument that the
defendant’s explanation for terminating him and not retaining him as an
independent sales agent was pretextual.
It was plausible for the defendant to believe that assigning the Bahamas
territory to the employee already handling Bermuda made more financial sense.
The plaintiff could not show that the defendant did not honestly believe its
explanation:
We apply a modified version of the “honest belief” rule with
regard to pretext. . . . Under this
rule, [the plaintiff] “must put forth evidence which demonstrates that the employer
did not ‘honestly believe’ in the proffered nondiscriminatory reason for its
adverse employment action.” . . . To
show that the proffered reason for its action is “honestly held,” [the defendant employer] “must be
able to establish its reasonable reliance on the particularized facts that were
before it at the time the decision was made.”
. . .. [The plaintiff], in turn, “must
be afforded the opportunity to produce evidence to the contrary, such as an
error on the part of the employer that is ‘too obvious to be unintentional.’” . . . Ultimately, however, pretext “is a
commonsense inquiry: did the employer fire the employee for the stated reason
or not?”
The plaintiff’s evidence, at best, consisted of references
to his impending retirement “in internal e-mails and documents, [the defendant’s]
replacement of [him] with younger salesmen at higher salaries, [its] lack of
transparency and candor about its plan to retire [him], and the allegedly
fraudulent alteration of the March 9, 2009 agreement (evidenced by the two
existing versions).” It was the
plaintiff “who wanted to reduce his sales territory and eventually go from
being a[n] employee to an independent sales agent responsible for a small number
of accounts – [his supervisor] and others at [defendant] used the terms
“retire,” “semi-retire,” and “retirement” to refer to this plan."
The Court refused to find pretext by comparing the plaintiff’s
$48k annual salary to the $70K and $65K annual salaries of the new salesmen
because neither of them assumed all of the plaintiff's prior duties. Further, the plaintiff overlooked the
new employees' prior experience, skill and comparative workloads.
CPC maintains that terminating [plaintiff] and allowing
existing employees to absorb his few remaining accounts at no cost was much
more cost-effective than paying Treadway $48,000 a year to continue servicing
them. These hiring and salary decisions may or may not make good business
sense, but [plaintiff] cannot establish pretext simply by questioning CPC’s
business judgment. This court is not a “super personnel department” tasked with
“second guessing employers’ business decisions.” . . . The ADEA cannot protect
older employees from erroneous or even arbitrary personnel decisions but only
from decisions that are unlawfully motivated.
While the evidence may indicate that the plaintiff was
treated unfairly, it does not establish that the employer’s explanation was
a pretext (or a disguise) for unlawful discrimination. Indeed, the plaintiff had seen the plan
mentioning his contemplated retirement and never objected to it.
What is ultimately fatal to [the plaintiff's] claim, however, is
that [he] himself initiated and impelled the chain of decisions he now
claims was motivated by discriminatory animus on the part of CPC decisionmakers.
[The plaintiff] proactively reached out to [his supervisor] in 2009 and asked to reduce his
sales territory because he was getting older and needed to “slow down.”
Together, [the supervisor] and [the plaintiff] negotiated the terms of the March 9, 2009
agreement which, under either version of the document, establish that
[his] sales territory would temporarily increase until a new salesman
could be hired to cover the Carolinas, and that [he] would then separate
from CPC (“go from Company employee”) to become an independent sales agent
handling only three accounts in the Bahamas and those existing accounts within
a 40-mile radius of his home in Johnson City, Tennessee. CPC executives,
including [his supervisor], used the terms “retire” and “retirement” to refer to this
plan.
When the transition
. . . slowed the process of hiring a new salesman, [the plaintiff]
called [his supervisor] throughout 2010 and 2011 to ask when someone would be hired, and even
referred two potential candidates . . .in an effort to expedite the hiring
process. After CPC hired Boepple and he assumed responsibility for the
Carolinas, CPC decided not to retain [the plaintiff] as an independent agent or
continue to pay him a full salary to service his few remaining accounts.
[The plaintiff] now argues that these decisions were made because of his age, but no
reasonable jury could infer such a discriminatory animus from CPC from decisions
that were prompted by [the plaintiff] himself.
NOTICE: This summary is designed merely to inform and
alert you of recent legal developments. It does not constitute legal advice and
does not apply to any particular situation because different facts could lead
to different results. Information here can be changed or amended without
notice. Readers should not act upon this information without legal advice. If
you have any questions about anything you have read, you should consult with or
retain an employment attorney.
