A Tale of Two Age Discrimination Cases in Central Ohio

Last week, a divided Franklin County Court of Appeals issued decisions in two different age discrimination cases.  One has been pending since 1999 and has been up and down the appellate process with a variety of results.  One has had several jury trials, while the other was a reversal of a bench trial.  In the first case, a nurse was terminated in 2009 for violating policies in the NICU at a local hospital after 21 years of service.  Although she appealed the case to an internal review board that recommended a lesser penalty, the president decided to sustain the termination of her employment.  The common pleas judge hearing the case ruled in her favor only to be reversed last week on appeal.  Mittler v. OhioHealth Corp., 2013-Ohio-1634.  In the second case, the plaintiff filed his lawsuit after his 1998 separation from employment.  The case was initially dismissed on summary judgment in 2001, was reversed on appeal, resulted in a jury verdict in 2002 awarding over $700,000 in compensatory (emotional distress) damages and $25M in punitive damages (as well as attorney fees), was reversed on appeal and so on.  More recently, the jury ruled against the plaintiff on his age discrimination claim, but last week a divided court of appeals remanded the case for yet another trial based on evidence it found was improperly excluded. Jelinek v. Abbott Laboratories, 2013-Ohio-1675.  This case is illustrative for a number of points, not the least of which is how unpredictable and how lengthy litigation can be.

To start with the briefer case, in Mittler, the plaintiff was fired following two incidents.  In one, she took a picture of a volunteer holding infant twins without first obtaining the permission of the babies’ mother (who later objected to volunteers holding her babies).  She had given a copy of the photo to the volunteer before obtaining permission and did not self-disclose her alleged HIPAA violation when the mistake came to light. She also mistakenly administered eye drops to the same infants and failed to submit an incident report. The HIPAA violation subjected the plaintiff to immediate termination.  On appeal, the problem review committee unanimous recommended the imposition of a less serious penalty.  However, the hospital’s president upheld the termination. 

The case was tried to the bench (instead of a jury) and the court found that the plaintiff would not have been terminated but for her age.  However, on appeal, the Court of Appeals concluded that she could not prove age discrimination because she could not show that she was replaced by a younger person.  According to the Court’s majority, no new employees were transferred to her shift after her discharge; her duties were merely redistributed among existing employees (some of whom were older than her).  The dissent noted that four older nurses had been terminated in two months and night shift nurses were hired and eight months later a day shift nurse was hired.  Therefore, the dissent agreed with the trial court that the plaintiff’s termination result in the hiring and retention of younger employees.

The plaintiff also could not show that younger employees were treated differently.  Her alleged comparators all reported their mistakes, unlike the plaintiff.  The dissent focused on alleged mistreatment of older nurses in other contexts.  In short, the dissent did not believe that the plaintiff would have been fired, but for her age.

The Jelinek case has had a long and tortured history.  The case was re-filed in 1999 alleging, among other things, that the plaintiff had been constructively discharged in 1998 on account of his age when he had been reassigned to an allegedly less desirable sales territory that included Gary, Indiana instead of to one that included Memphis, Tennessee which had been assigned to a younger peer who had previously worked in Chicago. The plaintiff had worked for the company for more than 30 years and was the oldest of the district managers when all of the district manager positions were eliminated.   The case was first dismissed on summary judgment in 2001, but was reinstated later that year on appeal (in an opinion written by Judge Tyack), on the grounds that the transfer to the smaller Indiana district instead of Tennessee could be discriminatory.  The Court also reinstated his claims for promissory estoppel and constructive discharge, but affirmed dismissal of the plaintiff’s claims for wrongful discharge in violation of public policy and retaliation.  The court denied the plaintiff’s motion for reconsideration and the Supreme Court declined to take his appeal.

Back at the common pleas court, the case proceeded to a jury trial in 2002.  Although the jury found for the employer on the promissory estoppel and constructive discharge claims, it found that the plaintiff had been discriminated against on account of his age, awarded him $700,000 in compensatory damages (for emotional distress), attorney fees, and $25,000,000 in punitive damages.  (This made a lot of news).   After motions for JNOV (judgment notwithstanding the verdict), a new trial and remittitur, the judge made a number of conditional orders in 2003.  First, he granted the defendants’ jnov motions.  Should that be reversed on appeal, he granted the defendants’ motion for a new trial.  Should that also be reversed, he denied the defendants’ motion for a new trial unless the plaintiff rejected a remittitur reducing the amount of compensatory damages to $100,000 and punitive damages to $4,000.000.  The trial judge also denied the plaintiff’s request for attorney fees.

On appeal, the case was remanded for another new trial on the age discrimination claim in 2005.  The Court agreed that there was enough potential of evidence of age discrimination to support the jury’s verdict and, therefore, the trial court had erred in granting the jnov motion.  However, there was insufficient evidence of intolerable working conditions necessary to show a constructive discharge.  The Court also concluded that it was within the trial court’s discretion to condition the grant of a new trial.

Again back at the common pleas court, there were two attempts at new jury trials, but both resulted in mistrials.  That judge then recused himself in 2008 and the case was assigned to a new judge who “issued a decision stating that 'the scope of the new trial is confined to the age-discrimination claim and excludes a retrial of the constructive-discharge claim, including facts or allegations that relate to that claim.'"  The plaintiff attempted to force the trial judge to permit him to again try his constructive discharge theory and filed a mandamus action for force the trial judge to do so.  The Court of Appeals agreed in 2010 that he had not prevailed on the constructive discharge as a separate claim in the last jury trial and the court had previously overruled his only objection to that verdict.   Therefore, the trial court had not manifestly erred.  On appeal to the Ohio Supreme Court, the decision denying the mandamus was affirmed near the end of 2010.  The plaintiff remained free to pursue his argument on appeal from any future verdict based on the trial court’s ruling, just as every party has a right to do.

The case was again tried to a jury in 2011 and this time the jury ruled against the plaintiff and in favor of the defendants.  Prior to deliberations, the trial court had directed a verdict for the defendants on the issue of punitive damages. The plaintiff again appealed and the appellate court again reversed, but this time based on evidentiary rulings against the plaintiff.   In ruling on pre-trial motions in limine, the plaintiff was precluded from introducing evidence concerning his prior claims that had been dismissed:  promissory estoppels, retaliation, wrongful discharge in violation of public policy and constructive discharge.  The Court again overruled the plaintiff’s objection to the exclusion of all evidence related to his constructive discharge theory.   The Court also affirmed the trial court’s directed verdict on the issue of punitive damages.

 According to the Court’s opinion from last week (coincidentally, also written by Judge Tyack),  the plaintiff “was precluded from referring to the crime rate in Gary, Indiana, the quality of the Lake County territory, and any testimony referring to a memorandum allegedly saying that all employees over 50 years old with 20 years of service should take early retirement.”  This evidence had previously been introduced to support the plaintiff’s defunct constructive discharge claim.  However, the plaintiff argued that he should still be permitted to introduce this evidence to explain why this territory was undesirable and why the employer should not be believed in contending that it was equivalent to the territory offered to younger peers.

 

Evidence that the territory was "collapsed" from twelve counties to two shortly before it  was offered to [the plaintiff] addresses both the issue of pretext, and the reason why [the plaintiff] was reluctant to accept the territory. This pretext evidence was critical to [his] ultimate burden of proof and therefore its exclusion was highly prejudicial. By taking the extreme position that any mention of the quality of the territory related only to constructive discharge, the trial court abused its discretion.

The trial court also excluded testimony by a former salesperson that the retired vice-president of sales had discussed with him in 1999 a memorandum written in 1997 that employees over the age of 50 with over 20 years of service (like the plaintiff) should retire.  No such memorandum was ever produced as evidence and the company denied that it even existed.  The defendants objected to this testimony as hearsay because the vice president had retired the year before the alleged conversation.  However, the plaintiff argued and the Court agreed that it could constitute evidence of an admission by a party-opponent because the vice-president was an individual defendant at the trial. “Since the alleged memorandum was never produced, the jury can decide how much weight, if any, to give to [the vice president’s] admission.”

 There were some other interesting evidentiary issues.  Typically (and was true in this case), it is the plaintiff and not the defendant which seeks to introduce evidence about the other party’s wealth.  In this case, however, because the plaintiff’s constructive discharge claim had been rejected in prior proceedings, his only claim for damages for related to the emotional distress of losing his substantial income and having bills to pay.   The defendants showed that he was a millionaire at the time he resigned and had just bought his wife a Mercedes automobile.  They also showed pictures of his home to the jury.  The Court found it was within the trial court’s discretion to allow this evidence because the plaintiff’s:

 

financial situation was at issue because his claim for compensatory damages was based entirely on emotional stress caused by his financial concerns.  [The plaintiff] testified that he had sleepless nights, tossing and turning, worrying about how much money he had in the bank, that he was very stressed about money, and he was concerned about making ends meet.

The defendants argued (and the jury was instructed) that the plaintiff’s position was eliminated in a reduction in force.  However, the plaintiff was denied discovery on the RIF and precluded from introducing statistics.  The company argued that statistics were irrelevant since he had not alleged a disparate impact theory. The Court overruled the plaintiff’s objection at this point as moot, but ordered that “if, when the case is retried, [the company] intends to argue that the elimination of  [the plaintiff’s] position was part of an overall reduction in force in order to receive the heightened jury instruction, [he] should be allowed to rebut [its] claim by means of statistical evidence.”

 The Court agreed that the plaintiff had failed to present sufficient evidence to request the jury to rule on punitive damages.  At best, his evidence showed that there may have been a lack of formal EEO instruction, “but to infer that [the company] exhibited a conscious disregard for [his] right to be free from age discrimination requires a leap of logic not supported by the evidence.”

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 change or be 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.

A Couple of Recent Trial Court Decisions Shows that Truth Can Be Stranger Than Fiction

There have been a few notable trial court decisions within the last month that may interest you.  One deals with a $500K+ age discrimination award and the other concerns vegans and flu shots.   I usually do not report on these  decisions because they sometimes change on appeal and are not binding on other trial courts.  However, they can be indicative of legal issues invading the workplace and demonstrate why it is often best to avoid litigation if possible. 

The verdict receiving the most local media buzz is the $500K+ age discrimination award in Warden v. Ohio Department of Natural Resources.   The Ohio Court of Claims ruled in favor of a retired employee who was rejected for his application to be rehired into his old job (for which he was undeniably the most qualified applicant) because the ODNR applied a new and unpublicized policy during the last recession of not rehiring retirees into their former jobs while they were also collecting a pension – a practice referred to as “double dipping.”  A review of the court docket shows that this case is even more interesting (to employment attorneys at least) than the significant monetary judgment reflects or the local media has reported.

As explained in the plaintiff’s summary judgment motion, and the Court’s liability opinion, the plaintiff accepted a two-year buy out and retired in 2006. He was re-hired as an independent contractor to essentially perform his old job for a series of short-term contracts.  When a job similar to his old job was posted, he was encouraged to apply and did so.  His application made it through the screening process and he was interviewed.  The plaintiff received the highest interview scores and several managers/directors went to bat for him to be hired (both before and during the litigation).  At no time during the process was he told about a policy to not hire retirees.  (There was also a factual dispute as to whether the interviewers had been informed of the policy).  The HR Director refused to hire him because he was a retiree.  Therefore, the job went to the next most qualified applicant who was 15 years younger.  The plaintiff’s complaint alleged that his age was a motivating factor in the decision.

The ODNR explained that it had enacted the policy because “double dipping creates a distrust with the public.”  Re-employment of retirees was to be allowed only for short-term contracts where the job required specialized knowledge or experience and a number of factors were to be considered in evaluating exceptions. (The Court only noted one exception which had been made).  While the policy was memorialized in a memorandum by one HR Director, there was no written directive distributed to division heads or HR staff.  The court found that the policy -- against re-hiring retirees collecting a pension -- did not constitute direct evidence of discrimination, but rather, was a legitimate and non-discriminatory reason to reject the plaintiff’s application.  Moreover, the Court also concluded that the plaintiff failed to show that the ODNR’s explanation was pretextual for age discrimination.   Accordingly, the Court rejected the plaintiff’s disparate treatment theory of recovery.

Shockingly, the Court then concluded that the plaintiff should prevail on a disparate impact theory of liability even though this theory was not plead in the Complaint or  even mentioned in the plaintiff’s post-trial brief and no statistical evidence had been presented.  (In fact, the plaintiff’s post-trial brief even cites in its first footnote  to another Court of Claims summary judgment opinion from three years ago which had saved a similar policy from legal challenge).  The Court concluded that any policy which precludes employment on the basis of retirement under Ohio Revised Code § 145.32 necessarily is based on the fact that the individual is over the age of 40 (because no one is eligible to retire below the age of 55 or 30 years of service).  It then disputed the whole basis for public condemnation of double-dipping on the premise that it is legal and saves money because the state contributes less to the pension accrual of an already-retired employee, etc.   Therefore, the  Court found that the policy did not constitute a reasonable factor other than age which could justify the non-hire of the plaintiff.

The defendant employer argued in its Motion for Reconsideration that the evidence showed that the plaintiff was the only individual adversely affected by the ODNR policy.  (It even pointed out that the only time that the plaintiff’s counsel ever mentioned the words “disparate impact,” it was done by mistake and he quickly corrected himself).   Nonetheless, the Court ruled that the plaintiff could prevail on any legal theory supported by the facts and that statistical evidence was not necessary in a disparate impact claim.

Instead of ordering the ODNR to hire the plaintiff, the Court ordered the payment of back and front pay instead.  The plaintiff had indicated that he had only intended to work another five years and the new employee had been working in the job for three years at this point.   This judgment amounted to more than $507K and included his $64K annual starting salary, presumed annual step increases, fringe benefits calculated to equal 34.5% of his salary, $17.3K for the increased tax liability from a lump sum payment, pension accrual, repayment of court costs (including the costs of litigating) and attorney fees of $53,545.   He was also awarded 3% judgment interest.

I expect this decision to be appealed.

Religious Discrimination/Vegans/Flu Shots.  In an opinion written by federal Judge Spiegel in Cincinnati, the Court refused to dismiss a complaint which alleged that a hospital employer violated the plaintiff’s rights under Title VII to exercise her vegan religion by firing her in 2010 for refusing to take a flu shot. (Until the last week, most flu shots could only be manufactured using eggs).   Chenzira v. Cincinnati Children’s Hospital Medical Center, No. 11-CV-917 (S.D. Oh. 12-27-12).  Complaints such as this can only be dismissed if there is no set of facts which could sustain the legal theory.  This is a difficult standard to meet, but many observers were still surprised because veganism is not usually considered to be a religion and a hospital ‘s undue hardship for such a religious accommodation seems to be obvious (although, here, the hospital allegedly used to accommodate the plaintiff in the past).  The result of the Court’s opinion is that the case will proceed with discovery, summary judgment motions and possibly trial if the parties do not first settle the case. 

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 change or be 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.

Sixth Circuit: Plaintiff’s Evidence Sufficient to Show Pretext of Age Discrimination Even Though Plaintiff’s Work Was Absorbed by Remaining Employees

Last week, the Sixth Circuit issued a decision reversing summary judgment given to an employer on an age discrimination claim, although it affirmed dismissal of the ADA and ERISA claims that the plaintiff was fired because of the health insurance costs incurred because of his wife’s disability.   Gaglioti v. Levin Group, Inc.,  No. 11-3744 (6^th Cir. 12-13-12). The Court found that the plaintiff produced enough evidence for the jury to find pretext because the employer informed him and insisted throughout the litigation that it had terminated him because his position had been temporary even though the plaintiff denied this and he received health insurance like a regular employee.   Further, the employer did not argue until the litigation phase that his termination was motivated by his poor performance.  The employer also raised late in the process that there was not enough work for the plaintiff to do even though the evidence established that two younger accountants had been hired after the plaintiff and the small department continued to grow after plaintiff’s termination.  Finally, the employer’s two decisionmakers each gave different reasons for why the plaintiff was terminated.  While none of the evidence proved that the plaintiff was terminated on account of his age, the evidence was sufficient for a jury to reject the employer’s business explanation for his termination.   Moreover, the Court concluded that it was not required to grant summary judgment under the same actor inference – i.e., because the same person that hired the plaintiff in 2008 was the same person who fired him in 2009 regardless of his age.

One of the interesting issues in this litigation was that the Courts concluded that the plaintiff could prove a prima facie case even though no younger employees were hired after his termination.  Instead, his work was distributed among two younger accountants hired after he was hired, but months before he was fired.  The employer had argued that – unlike the plaintiff -- they had always been designated as permanent, regular employees.  Because the Court ultimately found there was a factual dispute as to whether the plaintiff had been hired as a temporary employee, it rejected the employer’s argument.  However, this argument has been successful in countless other cases where the plaintiff was indisputably a regular employee and was terminated for a lack of work, so it’s unclear why the plaintiff’s temporary status was even relevant.   “The district court was correct to find that the retention of two younger accountants while [the plaintiff] was terminated is sufficient for [him] to meet his modest burden of proving a prima face case of  discrimination.”

Interestingly, the Court rejected the plaintiff’s argument that pretext could be shown by the employer’s differing explanations for his termination.  The employer contended on some level from the date of his termination through litigation that the plaintiff had been terminated because his position had been temporary.  At the EEOC level, the employer added that there was no further need for his services.  It was not until the summary judgment stage of the litigation that the employer produced evidence of poor performance partially motivating its decision (based on a complaint from a single individual that plaintiff was too slow).   Because the employer never abandoned the temporary position argument, the Court refused to find that the employer’s differing explanations, by itself, was enough to create sufficient evidence of pretext for a jury to consider.  (Not so coincidentally, the plaintiff conceded the truth that a complaint had been about him).  Nonetheless, the Court was clearly troubled by the inconsistencies in the employer’s justifications. “While this fact may not be enough to show a changing rationale, it would allow the jury to view the performance argument as a litigation strategy, as opposed to the real reason for the action.”

The key decisionmakers also could not agree on whether poor performance motivated the plaintiff’s termination.  The Company president said his poor performance played a role, while the plaintiff’s supervisor insisted that it was the temporary nature of his position and lack of work that motivated the termination.  “Inconsistent reasons given by key decision-makers as to the reason for the firing can provide evidence of pretext.”

What the Court focused on was the fact that the plaintiff received health insurance from his first day of work even though the employer’s employee handbook said this benefit was only for regular employees.   The company’s president also testified that he understood that the plaintiff had been a regular employee.   The only evidence that the plaintiff had ever been informed that he was merely a temporary employee came solely from the company’s president and the plaintiff’s supervisor.  Thus, the jury could infer that the later characterization of the plaintiff as a temporary employee was a post-hoc explanation created to disguise the real motivation for the plaintiff’s termination.

More fundamentally, to survive summary judgment, Gaglioti is not required to disprove the contention that his employers always viewed him as a temporary employee to—he simply has to show that it would be reasonable for a juror not to believe Levin Group’s claim. The discrepancy between Gaglioti’s official job classification and Levin Group’s purported understanding of his role is a reason to doubt Levin Group’s account, particularly when the only evidence to support this explanation is the potentially self-serving testimony of Levin and Pursley.

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 change or be 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.

Sixth Circuit: No Discrimination If Employer Honestly Believed the Plaintiff Was Poor Employee

On Friday, the Sixth Circuit affirmed summary judgment in favor of an employer on an age discrimination and retaliation claim even though the Plaintiff’s supervisor made comments two years before her termination that most of the employees were old like her and she received a negative performance evaluation days after complaining about her perception of age discrimination.  Blizzard v. Marion Technical College, No. 11-3441 (6^th Cir. 10-19-12).  Without discussing the cat’s paw theory of liability, the Court found that the comments were not related to the termination decision even though the speaker was the person who recommended the plaintiff’s termination.   The court also found that the negative performance evaluation was not sufficiently important to constitute an adverse employment action that would deter someone from engaging in protected conduct.  Nonetheless, the court found that the plaintiff’s replacement – hired seven months after her termination – was sufficiently close in age (a mere 6.5 years younger) so that the plaintiff could satisfy her prima facie case.   In the end, the court found there was insufficient evidence of pretext because she could not prove that the employer did not honestly believe she was a poor performer and because her termination took place more than six months after her protected conduct.

There were a number of interesting issues in the case.  First, the Court refused to confine the reasons for the plaintiff’s termination to her notice of termination.  Instead, it also considered the memorandum recommending her discharge and her performance evaluation from two years earlier.   Second, the court refused to give weight to opinions of the plaintiff’s job performance offered by co-workers who had infrequent interactions with her or a supervisor who left three years before she was terminated.

Third, the court declined to find pretext about the quality of the plaintiff’s work performance because the employer honestly believed that her performance was subpar. 

 

This court has adopted a “modified honest belief” rule, which provides that “‘for an employer to avoid a finding that its claimed nondiscriminatory reason was pretextual, the 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 employee, 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.’ To overcome the employer’s invocation of the honest belief rule, the employee “must allege more than a dispute over the facts upon which [the] discharge was based. He must put forth evidence which demonstrates that the employer did not ‘honestly believe’ in the proffered non-discriminatory reason for its adverse employment action.”

The plaintiff attempted to expose the employer’s dishonest belief by attacking the employer’s failure to investigate the allegations made against her by her supervisor. “However, it is not necessary “that the decisional process used by the employer be optimal or that it left no stone unturned.”  It was only necessary that the employer’s reliance on the facts before it at the time of the decision to dismiss her was reasonable.  An employer need only show that it made a reasonably informed and considered decision to terminate the plaintiff’s employment.  The plaintiff’s disagreement with the decision to terminate her is insufficient to demonstrate discrimination.

Fourth, the court rejected the plaintiff’s argument that her performance failings were insufficient to motivate her termination because younger employees made the same mistakes but were not fired.   The court found the comparators were not similarly situated because their conduct and mistakes were not “substantially identical.”  While one employee made typographical errors that resulted in checks being returned, the plaintiff’s mistakes resulted in double payments to vendors. “These are not acts of comparable seriousness.”  

Fifth, the court refused to find pretext from a statement – about her being old --  made by her supervisor two years before he recommended her termination because it was not related to the termination decision.

Sixth, the court rejected any argument about her being retaliated against because of discrimination complaints she made to the Human Resources Department because there was no evidence that HR told her supervisor or his boss before they decided to terminate her employment.   The court also refused to infer retaliation from complaints she made more than a year before her termination about discriminatory actions and statements by her supervisor.  “This timing does not “raise the inference that [the] protected activity was the likely reason for the adverse action.”

 Finally, the court refused to find retaliation in her negative performance evaluation, which was given only days after her first complaint of discrimination because she failed to show that “the performance evaluation constituted a materially adverse action.”

An adverse action is material if it “would ‘dissuade[] a reasonable worker from making or supporting a charge of discrimination.’ . . . Generally, a negative employment evaluation does not rise to this level unless it “significantly impact[s] an employee’s wages or professional advancement.” . . . [The plaintiff] has produced no evidence to support a conclusion that her June 2006 appraisal reduced her compensation or possibility for future advancement. Therefore, the 2006 performance evaluation was not a materially adverse employment action for the purposes of [her] retaliation claim.

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 change or be 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.

Divided Sixth Circuit Dismisses Age Discrimination Claim of News Anchor Who Objected to Assignment and Walked Out

This morning, a divided Sixth Circuit affirmed the dismissal of an age discrimination claim brought by a former news reporter who walked out of the station after he said that he planned quit following a suspension for objecting to an assignment. Sander v. Gray Television Group, Inc., No. 10-6120 (6th Cir. 4-19-12). This is yet another case in which the majority of the Court found it to be non-discriminatory to ask older employees about their retirement plans for succession planning purposes. The majority found that the plaintiff could not show that he was terminated on account of his age because he had resigned when he walked out after telling people he planned to quit. They also found the employer had a legitimate non-discriminatory reason to fire him based on his refusal to perform an assignment within his job duties and then telling co-workers he planned to quit over it. Management was justified in concluding that it would undermine his supervisor to permit the anchor to object like this to routine assignments. However, the dissent noted that his resignation had been ambiguous and the management admitted that they knew he did not really intend to quit. Moreover, there was evidence that his direct supervisor had previously made derogatory comments about his age and that other older anchors had potential claims for age discrimination as well. The majority dismissed those comments because the supervisor was not the decisionmaker.

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 change or be 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.

Ohio Appeals Court Rejects Invasion of Privacy, Retaliation and Age Discrimination Claims

Yesterday, the Franklin County Court of Appeals affirmed the dismissal on summary judgment of an age discrimination claim involving the denial of a promotion, and retaliation and a claim for invasion of privacy for not maintaining the confidentiality of a performance plan document. Dautartas v. Abbott Laboratories, 2012-Ohio-1709. First, the Court had no difficulty rejecting the denial of promotion claim in that the person selected was only two years younger than the plaintiff and the plaintiff testified that one of the decisionmakers stated afterwards that she did not even know the plaintiff's age. Consideration of the plaintiff's age for purposes of succession planning (i.e., determining who might need to be replaced) was by itself insufficient to constitute evidence of direct discrimination. The passage of two months between the plaintiff's complaint of discrimination and the alleged retaliatory action was too remote by itself to create the inference of retaliation, particularly when the plaintiff had requested the Human Resources Manager to not conduct an investigation. Finally, the Court rejected the invasion of privacy claim because the attachment of a performance plan to a calendar entry accessible by plaintiff's peers was shown to be false, was not an intentional action and did not concern purely private matters because the statements concerned her professional and business life.

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 change or be 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.

Sixth Circuit Affirms Dismissal of Age Discrimination Claim

This morning, the Sixth Circuit affirmed the dismissal of an age discrimination of a supervisor whose position has been eliminated in a reduction in force. Metz v. Titanium Metals Corp., No. 11- 3117 (6th Cir. 3-29-12). The Court concluded that employees laid off in a reduction in force have a higher standard of proof and cannot show that they were replaced by a younger individual when their duties were merely absorbed by the remaining employees. The Court also rejected the argument that references to the tenure and planned retirement of an older employee and the “new ideas” of the younger employee constituted direct evidence of age discrimination. Finally, the Court found nothing discriminatory in using a different standard to evaluate and compare employees for purposes of a RIF than is used in their annual performance evaluations.

According to the Court’s opinion, the plaintiff was a shipping supervisor who agreed to the promotion of a much younger supervisor to help him and an older supervisor when the company was experiencing record sales volume. At the time, the HR Manager indicated that the new employee would bring new ideas and might be able to replace the oldest supervisor when he retired in the near future (having already worked there for 42 years at that point). When the recession hit and sales volumes decreased dramatically, the company reduced costs by, among other things, reducing the number of shipping supervisors by one position. The company then evaluated all of the salaried employees and ranked them to determine which employees would be retained in the existing positions. The plaintiff ranked lower than his co-workers on this survey and was ultimately laid off.

The Court rejected the argument that the HR Manager’s comments constituted direct evidence of age discrimination. Tenure is not the same as age. References to the younger employee’s “new ideas” was ambiguous. Finally, mention of the planned retirement of the oldest employee did not constitute discrimination.

The Court also rejected the argument that the younger employee replaced the plaintiff because he had initially been promoted – with the plaintiff’s agreement – to help him. In addition, there was a reduction in the number of shipping supervisor position. Finally, the younger employee absorbed the plaintiff’s duties into his existing duties; they were not new duties.

Finally, the Court rejected the argument that management manipulated the RIF evaluation ratings to retain the younger employee over the plaintiff when they had traditionally received the same performance evaluation ratings. First, the employer retained the oldest shipping supervisor. There was also evidence that the plaintiff’s RIF rating was based in part because he “had occasionally been disrespectful toward management, had failed to be forthcoming about problems, and had failed to resolve conflicts among employees in [his] department.” Management had been unanimous in ranking the younger employee higher than him. The fact that their performance review ratings had been similar and the RIF evaluation was different was like comparing apples and oranges. One rated the employees against the same standard; one compared them to each other.

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 change or be 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.

Sixth Circuit: Many Ways to Defeat an Age Discrimination Claim

Last month, the Sixth Circuit affirmed the dismissal of an age discrimination claim that had been filed in 1999. Lefevers v. GAF Fiberglass Corp., No. 00-5567 (6th Cir. 1/11/12). The case had been around so long because it had been stayed during the employer’s bankruptcy proceedings. In it, the Sixth Circuit methodically rejected each argument that the plaintiff asserted in favor of finding direct evidence of discrimination and pretext. Moreover, it started with an interesting Tolstoy quotation: “We do not beat the Wolf for being gray, but for eating the sheep.” In other words, firing an older worker is illegal when it is based on age, not when it is based on another reason (such as a reduction in force and/or inadequate job performance).

The plaintiff first complained about a number of age-related comments made by managers (other than, of course, the decision-maker). One comment referred to “old” Bob Dole running against “dumb” Bill Clinton. Another concerned an inquiry into retirement plans. An HR manager inexplicably said that something needed to be done in the next year with the older supervisors. Yet another manager denied any plan to eliminate older supervisors because they were needed to run the plant. “Statements by nondecisionmakers, or statements by decisionmakers unrelated to the decisional process itself [can not] suffice to satisfy the plaintiff’s burden . . .’ of demonstrating animus.” The Court had no trouble finding that the statements were too unrelated in time and place to have influenced the individual who ultimately decided to terminate the plaintiff. Moreover, “questions concerning an employee’s retirement plans do not alone constitute direct evidence of age discrimination.” (emphasis added).

Next, the Court had no difficulty accepting the employer’s explanation that the plaintiff had been selected for termination during a reduction in force because of his inadequate performance. Among other things, he was not the only individual to lose his job, open jobs went unfilled and, obviously, the employer had ultimately sought bankruptcy protection (a drastic step if it was just to hide illegal discrimination against one employee). There were also numerous documents reflecting the employer’s opinion of his job performance, even if the plaintiff disagreed with those assessments. His “disagreement with GAF’s “assessment of his performance . . . does not render [GAF’s] reasons pretextual.” Moreover, poor job performance coupled with a reduction in force is a legitimate reason to terminate employment.

In addition, the Court found that the employer was actually motivated by his performance evaluations because three of the remaining peer supervisors were older or close in age to the plaintiff. Finally, it was insufficient to show that a younger supervisor absorbed some of his former job duties (on top of his existing job duties) when no one had been hired to replace him.

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 change or be 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.

Persistence Pays Off in Cuyahoga County Age Discrimination Claim When Only the Plaintiff Was Fired for Failing to Meet Sales Goals

Last week, the Cuyahoga County Court of Appeals reversed summary judgment in favor of an employer in an age discrimination claim when the plaintiff's evidence showed that he was fired in 2003 for alleged poor sales performance (in not meeting his sales goals for five consecutive years) even though the employer maintained the employment of younger salespersons whose sales quota were similar or worse, he was replaced by newly hired younger salespeople and the employer had taken away hi four largest accounts and reassigned them to younger salespeople before claiming his performance was unacceptable. Pattison v. W.W. Grainger Inc., 2010-Ohio-2484. The case bounced up and down the appellate chain on various procedural motions involving whether there was a final appealable order and timely appeal. However, when the merits of the trial court's summary judgment decision finally reached the court of appeals, it reversed the decision.

The Court of Appeals found two errors by the trial court. First, the trial court erred in finding that the plaintiff failed to satisfy his prima facie burden of proving that he was qualified for his position when it relied on the evidence asserted by the employer to justify his termination. The prima facie burden is not supposed to be difficult and the plaintiff had been employed in his sales position for more than 25 years before his termination. Former customers also spoke highly of him and several customers decreased the amount of their business with the employer after he was terminated. Thus, he was clearly "qualified" for purposes of his prima facie case.

Second, the Court of Appeals found that the plaintiff produced more than sufficient evidence of pretext to justify sending the case to a jury to resolve the factual disputes. To raise a genuine issue of fact as to pretext and defeat a summary judgment motion under this position, [a plaintiff] must show one of the following: "(1) that the proffered reason had no basis in fact, (2) that the proffered reason did not actually motivate the action, or (3) that the proffered reason was insufficient to motivate the action." First, the plaintiff produced evidence that he had been fired for failing to meet sales goals when at least five younger salespeople had similarly failed to meet the same goals and had not been terminated. Indeed, he showed that he had received performance warnings and reprimands from his new, younger, supervisor when similarly situated younger employees had similarly failed to meet the same sales goals, but were not reprimanded. On the contrary, one of the younger salespeople had been promoted even though his sales volume was less than plaintiff's volume and others were simply transferred. "Given that [the employer] transferred or promoted significantly younger TM's, who were not meeting sales goals, while terminating [the plaintiff], who was by no means the least productive, raises an inference that [the employer's] stated reason for terminating [the plaintiff] was pretextual." In fact, the court found that the employer's stated reason for his termination was false. It was also arbitrary in that the decision of when to fire a salesperson based on poor performance was left to the discretion of the manager instead of a formula.

Second, the plaintiff showed that his accounts were distributed among younger salespeople (two of whom were newly hired and one was hired four months earlier), which was evidence of setting up the plaintiff to fail and discriminatory animus. Third, he showed that in the year before his termination only 1 of the 13 territory managers (his position) met his sales goal for the prior year and that person had just been hired and did not have any performance goals. Indeed, the supervisor testified that the territory had failed to meet sales goals in five of the last seven years. Finally, the plaintiff alleged that the supervisor had forced out other, older salespeople like himself.

In light of the plaintiff's factual evidence, the court remanded the case back to the trial court for a jury trial.

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 change or be 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.

Sixth Circuit: Disability Leave and Receipt of Social Security Benefits Do Not Destroy ADEA Claim Following a RIF.

This morning, the Sixth Circuit Court of Appeals in Cincinnati affirmed the dismissal on summary judgment of an age discrimination claim brought by a salesperson who took disability leave shortly after being notified that his position was being eliminated in a reduction in force. Johnson v. Franklin Farmers Cooperative, No. 09-5483 (6^th Cir. 2010). However, it did so for different reasons than the trial court – which had found that the plaintiff failed to show that the employer's explanation was a mere pretext for discrimination. Rather, consistent with similar claims, the Court ultimately agreed that the plaintiff could not show that he had been replaced, or selected for the RIF based on his age, when his duties were reassigned among the remaining employees. However, before reaching this unsurprising conclusion, the Court also rejected several arguments raised by the employer, including: (1) that the plaintiff did not suffer an adverse employment action when he took short-term and long-term disability leave after being notified that his position was being eliminated and (2) that his disability leave and receipt of social security benefits rendered him unqualified for his position. Nonetheless, the Court rejected the trial court's conclusion that the plaintiff had shown that he had been replaced by a younger employee when it found indisputable evidence of a RIF and imposed a higher burden of proof on the plaintiff to show that his age had been a factor in his selection for the RIF. Thus, it affirmed summary judgment for the employer.

The Court rejected the employer's argument that the plaintiff could not show as part of his prima facie case that he suffered an adverse employment action when he applied for short-term disability benefits (and then received LTD and social security benefits) shortly after being notified on September 5 that his position was to be eliminated in the RIF and before the position was actually eliminated on September 30. The employer denied the plaintiff's request that he be permitted to continue working for another 19 months (when he would qualify for full retirement benefits) and the plaintiff testified that he would have continued working if his position had not been eliminated (regardless of the content of his disability benefit applications). "Viewed in a light most favorable to [the plaintiff], the evidence supports [the plaintiff's] assertion that he involuntarily ceased working two weeks before [the employer] would eliminate his job, and that [the employer] brought about a significant change in his employment status. The prima facie showing is not intended to be onerous." Instead, such an argument would be better evaluated, if at all, at the pretext stage of analysis.

The Court also rejected the employer's argument that the plaintiff could not prove as part of his prima facie case that he was qualified for the salesperson job when he had submitted applications stating that he was completely unable to work. However, the Court found that the plaintiff had adequately explained the apparent inconsistency by, among other things, affidavits from co-workers, the employer's General Manager and former customers about how well he performed his job before he began his disability leave.

The Court rejected the trial court's conclusion that the plaintiff had been replaced by a younger employee. According to the Court's opinion, the employer selected three employees for the September 30 RIF because of a budget deficit, but it rehired one of them in November and delayed the termination of the other until he qualified for retirement on December 30. In addition, the General Manager admitted that some of his business decisions were influenced by the existence of the pending litigation because he did not want to have to admit that he actually needed an outside salesperson, like the plaintiff (thus, implying that he was merely waiting for the conclusion of the litigation to formally name the younger employee as the employer's outside salesperson). The plaintiff's duties had been distributed among two younger employees. The Sixth Circuit found that the employer had legitimately conducted a RIF despite the above facts because the retired employee was not replaced and the rehired employee was brought back to replace another departing employee. Thus, the employer's headcount following December 30 was three less than it had been when it announced the RIF on September 5.

The Court also found that the plaintiff's duties had been assumed by two younger employees, who continued to perform their existing job duties. " An employee is not replaced for purposes of the fourth element of a prima facie case of discrimination when another employee is assigned to perform the plaintiff's duties in addition to other duties, or when the work is redistributed among other existing employees already performing related work."

Because the plaintiff's termination took place in a RIF, the Court imposed a higher burden of proof on him to show that he was impermissibly selected for the RIF on account of his age:

Where . . . there is a reduction in force, a plaintiff must either show that age was a factor in eliminating his position, or, where some employees are shifted to other positions, that he was qualified for another position, he was not given a new position, and that the decision not to place him in a new position was motivated by plaintiff's age. . . . . The purpose of the additional evidence requirement is to ensure, in reduction of force cases, that the plaintiff has presented evidence to show that there is a chance the reduction in force is not the reason for the termination.

Ultimately, the Court concluded that the plaintiff could not meet the higher burden of proof which applies in a RIF. The plaintiff admittedly did not have direct evidence of age discrimination and could not show an inference of age discrimination simply from the fact that two younger employees were retained instead of him. Finally, the General Manager's admission that his business and promotional decisions were influenced by the fact of the litigation was insufficient to carry the plaintiff's burden of proof.

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 change or be 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.

Sixth Circuit: Employer’s Summary Judgment Reversed Where Plaintiff Was Denied Deposition of Kmart Chairman and SVP of Finance

This morning, a divided Sixth Circuit Court of Appeals reversed summary judgment entered in favor of Sears Holding Corporation f/k/a Kmart Holding Corporation on an age discrimination claim brought by the former Senior Vice President of Sales/Division President because he had been denied the opportunity to depose the Chairman of the Board and Senior Vice President of Finance of the company about potentially ageist comments after establishing a prima facie case of age discrimination. Marsico v. Sears Holding Corporation, No. 07-2231 (6^th Cir. 3/26/10). The Court's majority found the denial of the plaintiff's motion to compel discovery to be an abuse of discretion by the trial judge because the alleged comments were equivocal and the plaintiff had shown that he had been replaced by someone who was considerably younger than him. He had been employed by Kmart for 30 years.

In particular, the Court's decision reflects that there had been deposition testimony that the new post-bankruptcy Chairman (who was 41) mentioned to the plaintiff that he had "been around here a long time" and there were some non-specified things that he did not like about store operations. He was also alleged to have said that what was "wrong with these Kmart people, that old way of thinking." Plaintiff was then demoted to a Vice President position for Super Kmart in September 2003, was replaced as SVP by and began reporting to someone who was substantially younger, and, after he make that Super Kmart more profitable than Kmart, his salary was cut. After his demotion, the president offered in November 2004 to help find him another job elsewhere. When plaintiff protested and argued that he could still help the company, the president explained that the Chairman did not "think that someone's that's been around for 30 years can fix Kmart." At the end of that month, Plaintiff was informed that his VP position was being eliminated, but the SVP felt that he could be transferred to Sears after the merger of Kmart and Sears (although the VP of HR told plaintiff he disagreed). The new SVP suggested that he look for another job because no one cared about the sacrifices and contributions he had made for the company in the past. The SVP also allegedly told him that the SVP of Finance also wanted him gone from the company. Plaintiff resigned in February 2005 because of the age discrimination he had suffered and the hostile work environment.

While agreeing that the alleged comments made by the Chairman were not necessarily indicative of discrimination, they were ambiguous enough to justify asking him to clarify and explain them in a deposition because they could indicate discriminatory intent. (The dissent noted that it was inconceivable that comments post-bankruptcy comments about the business savvy of Kmart's former officers could be construed as discriminatory as opposed to describing failed business strategies). In short:

It was through the discovery already conducted that Plaintiff obtained the evidence represented by
witnesses' comments, and given the substance of the comments, there is enough evidence of discriminatory intent such that additional discovery should have been permitted. No one but Lampert and Crowley can testify as to whether the comments cited by Marsico were motivated by age discrimination as indicated by the context and circumstances in which the comments were made. Plaintiff should have been allowed to elicit such testimony and use it in responding to Defendant's motion for summary judgment. Accordingly, we conclude that the district court abused its discretion in denying Plaintiff's motion to compel the depositions and hold that Marsico may depose both Lampert and Crowley.

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 change or be 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.

Sixth Circuit: A Tale of Two RIFS With Different Endings

This week, the Sixth Circuit released two opinions in two days addressing claims that the plaintiff was selected for a reduction in force in violation of federal employment laws. In one, the Sixth Circuit affirmed summary judgment for the employer and in the other it reversed it and sent the case back for trial. In one case the plaintiff claimed she was selected for the RIF because of her age; in the other the plaintiff claimed that she was selected because of medical leave. In one case, the managers may have violated the employer’s RIF policy which they claimed they were following; in the other the managers likely violated the employer’s RIF policy, which they blamed on ignorance. This comparison highlights how even the slightest difference in facts can lead to much different results.

In the first case, Cutcher v. KMart Corporation, No. 09-1145 (6th Cir. 2010), six employees were selected to be laid off from a particular store as part of a nationwide layoff. According to the Court’s opinion, the plaintiff was selected for the RIF a few weeks after beginning FMLA leave and her duties distributed among the remaining sales associates. In the selection process, the employer considered her most recent performance evaluation and then conducted an updated evaluation (measuring the same competencies as the annual evaluations and containing a space for additional comments). The plaintiff had received an “exceeds expectations” or “exceptional” overall evaluation rating in the prior three years and then began a six-week medical leave involving surgery a few days after her last performance evaluation. A few weeks into her medical leave, the employer announced the RIF and selected plaintiff and five other employees to be laid off.

The employer’s updated evaluation form prohibited managers from considering a medical leave of absence as a factor, and required the manager to specifically explain if the employee had been downgraded since the last annual evaluation. It also required managers to base the updated evaluations on objective, observable performance. Notwithstanding these instructions, the plaintiff’s managers downgraded her updated performance evaluation rating even though they admittedly could not identify any performance issues in the 20 days between her annual evaluation and the updated evaluation conducted for the RIF. Rather, they explained that they felt her prior evaluation had been inflated and she possessed undocumented poor customer service and teamwork skills. In addition, they mentioned her poor customer service and teamwork skills and wrote “LOA” in the comments section when asked to explain on the form the difference in the ratings. Nonetheless, the managers denied that the plaintiff’s medical leave of absence affected their decision and claimed that the notation was simply to remind them to delay the date of her layoff. The depressed evaluation rating the plaintiff received after beginning her medical leave put her in the bottom six of the employees’ ranking and caused her to be selected for layoff.

In reversing the summary judgment which had been entered for the employer, the Court noted that the unique facts of this case created factual dispute on the plaintiff’s FMLA claims (for interference with her medical leave and retaliation for taking medical leave) which could only be resolved by a jury in that a jury could disbelieve the employer’s explanation and find it pretextual based on the circumstantial evidence that had been provided:

The jury could also conclude that [Plaintiff’s] termination was based on her FMLA leave, because none of Kmart’s asserted reasons for her lower RIF appraisal scores were documented, and Kmart admitted that nothing in her performance changed during the twenty-day period between her last annual appraisal and the RIF appraisal. Although Kmart contends that variations between annual appraisal scores and the RIF appraisal scores were common, that [Plaintiff’s direct supervisor] inflated the annual appraisal scores, and that [Plaintiff’s] performance had been declining, a reasonable jury could reject Kmart’s contentions. Given [Plaintiff’s] prior annual appraisal scores, the minimal amount of time that passed between her most recent annual appraisal and the RIF appraisal, Kmart’s admission that [Plaintiff’s] performance did not change during that short period of time, the inclusion of the “LOA” notation on the Associate Performance Recap Form, and the lack of any documented evidence demonstrating a prior concern with her job performance, a jury could infer that her leave status impacted her RIF appraisal ratings, thus leading to her termination.

. . ..

[Plaintiff] also argues—and the jury could conclude—that the same circumstantial evidence supporting the causal connection between her FMLA leave and her termination demonstrates that Kmart’s proffered non-discriminatory reason was pretextual. Specifically, the following facts could show pretext: the temporal proximity between her leave and termination; the lack of documentation to corroborate her lower RIF appraisal scores; the lack of temporal proximity between the events that Kmart alleges justified her lower RIF appraisal scores and her termination; her documented favorable work history; the discrepancy between her prior annual appraisals and her RIF appraisal, and the “LOA” notation next to [Plaintiff’s] name on the Impacted Associates Form.

In the second case, Schoonmaker v. Spartan Graphics Leasing, No. 09-1732 (6th Cir. 2010), the employer laid off the two oldest employees on the third shift (both over 55) and kept the third employee, age 29. One of the employees was admittedly laid off because she was less than a year from retirement. Even though the plaintiff had more seniority than the younger employee who was retained, and even though the younger employee had been disciplined in the prior year for poor attendance, management felt that he got along better with the two supervisors than the plaintiff did. Management also felt the younger employee was more productive, but never documented that belief.

The Company’s RIF policy favored retaining the plaintiff over the younger employee and provided:

Business circumstances may result in a temporary or permanent reduction in the size of the work force. Making such decisions is not easy. However, the Company will attempt to identify employees who are the most qualified to perform the work available based on qualifications, productivity, attendance, general performance record and other factors the Company considers relevant in each case. When the Company considers these factors to be relatively equal, decisions will be guided by relative length of service.

Summary judgment was granted to the employer because the plaintiff could not show that she had been replaced, as the remaining, younger employee assumed her former duties in addition to continuing to perform his own regular duties. Nonetheless, the Court of Appeals recognized that the plaintiff might be able to show that she had been replaced if she could show that her qualifications were superior to the younger employee who had been retained. However, her subjective belief of superior performance and her admittedly better disciplinary history were insufficient to meet this prima facie burden. Moreover, although she would arguably be entitled to rely on statistical evidence to satisfy her burden (in that the two oldest employees of the three person department were laid off), the Court found the sample size to be too small to be statistically significant. While the district court believed that it would have been relevant if management had deliberately ignored the RIF policy; their ignorance of the policy was insufficient to meet the plaintiff’s burden of proof.


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 change or be 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.

Franklin County Appeals Court: Nothing is Reasonably Reliable In a RIF or Public Litigation.

Last month, the Franklin County Court of Appeals affirmed the dismissal of a defamation and wrongful discharge suit brought by the former head of security for Capital University whose job was eliminated in 2006 during a budget crisis. Woods v. Capital Univ., No. 2009-Ohio-5672. Although the 54-year old plaintiff had been told in writing during his exit interview that his performance played no role in the elimination of his position (and he had received nothing but promotions prior to his termination), the university’s attorney was quoted in two local newspapers as attributing part of the termination decision to “job performance issues.” His responsibilities were divided and his public safety management responsibilities were given to a 28-year old safety officer. Nonetheless, the Court affirmed dismissal because the allegedly defamatory statements related to a matter of public concern, which required proof of actual damages or actual malice, and the redistribution of duties to existing employees cannot support an inference of age discrimination. Finally, his promissory estoppel claims were dismissed because the three verbal promises of continued employment were contracted by the terms of his written contract with the university.

According to the Court’s opinion, the plaintiff was eight years away from retiring from another college when he was hired by Capital to reorganize its public safety department. When he expressed reluctance to leave a secure position so close to his retirement age – particularly with friction that was likely to develop during the planned reorganization, he was assured by the VP/Treasurer that he would be employed at least eight years to retire at Capital. However, his offer letter only promised one year of employment. He was promoted the following year and given two more one-year appointments. When rumors surfaced about a possible budget deficit, he again sought reassurance about his job security and was again assured by the VP/Treasurer that his job was safe. When the VP/Treasurer was then fired, he sought and obtained similar assurance from the President, who then shortly thereafter left.

When an impending $12.5M deficit was revealed, a committee examined all positions and recommended the elimination of 72 positions, including that of the plaintiff. His termination letter informed him that his job was eliminated because of the budget difficulties and not because of his job performance. His public safety duties were reassigned to a 28-year old officer and his auxiliary duties to other employees. He then filed a lawsuit for $4.6M against Capital for age discrimination and promissory estoppel. The lawsuit received publicity in the local media and Capital’s attorney was quoted in two newspapers as stating that the plaintiff had been let go because of the budget difficulties and “job performance issues.” The plaintiff amended his claims to include the allegedly defamatory statements by the attorney. The trial court granted summary judgment to the defendants and the plaintiff appealed.

Defamation Claim

The Court of Appeals addressed the defamation claim first and found the attorney’s statement about the plaintiff being fired in part because of his job performance to be defamatory on its face (or defamation per se) since it had the tendency to hurt plaintiff’s career and ability to find another job. The Court rejected the defense attempt to

characterize this statement as vague and contend that if it is defamatory at all, it is only defamatory per quod. We disagree. No employer fires an employee for good job performance. The only reasonable reading of [the attorney’s] statement is that Capital terminated [the plaintiff’s] employment for two reasons, and one of those reasons was [the plaintiff’s] poor job performance. Thus, the statement in and of itself tends to injure [the plaintiff] in his occupation as any employer would hesitate before hiring a potential employee who underperformed in his previous job. Such a statement is defamatory per se.

Typically, damages in such situations are presumed without proof or pleading. However, in this case, the Court found the statement to also have limited protection from the First Amendment. Because the plaintiff worked for a private college, he was not a general public figure. Moreover, the fact that he filed a lawsuit – by itself – did not render him a limited purpose public figure. However, the fact that he sought $4.6M in damages from a significant private institution which was having very public budget difficulties rendered the issue of the reduction in force and his lawsuit a matter of public concern – as evidenced by the significant media coverage. Therefore, the claim was governed by the United States Supreme Court’s decision in Gertz v. Robert Welch, Inc. (1974), 418 U.S. 323, 345-46, which concluded that:

in such cases, the states could define for themselves an appropriate standard of liability, so long as they did not impose liability without fault. Gertz, 418 U.S. at 347. Subsequently, Ohio adopted the ordinary negligence standard as the standard of liability for actions involving a private individual defamed in a statement about a matter of public concern. Landsdowne v. Beacon Journal Publishing Co. (1987), 32 Ohio.St.3d 176, 180. In addition to requiring an element of fault, the Gertz court also limited the type of damages recoverable in defamation cases involving private individuals and statements regarding a matter of public concern. Given the constitutional command of the First Amendment, . . . the states could no longer permit recovery of presumed or punitive damages, at least when liability was not based upon a showing of actual malice. Gertz, 418 U.S. at 349, . . . Thus, in Ohio, a plaintiff must prove either: (1) ordinary negligence and actual injury, in which case he can receive damages for the actual harm inflicted; or (2) actual malice, in which case he is entitled to presumed damages.

Thus, the plaintiff was required to show actual malice or actual injury (i.e., “out-of-pocket loss, impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering”). However, the plaintiff’s testimony that he felt that his job hunt was impaired by “google searches” of the attorney’s statement was too speculative to support proof of actual injury. Moreover, he failed to introduce any evidence that the attorney knew that his statement was false at the time it was made. Therefore, summary judgment on his defamation claim was upheld.

Retaliation

The plaintiff also claimed that the attorney’s defamatory statement was made in retaliation for the plaintiff’s consultation with an attorney following his termination. However, the Court refused to infer causation (i.e., the defamatory statement from the consultation with counsel) based on the passage of two months between the demand letter from the plaintiff’s attorney and the newspaper accounts repeating the defamatory statement. Because there was no other evidence of causation or proving a link between the two events, the Court affirmed summary judgment.

Age Discrimination

Typically, a discrimination claim requires that the plaintiff show that he was replaced by someone outside the protected class. The Court noted that this is extremely difficult, if not impossible, to show when the plaintiff was fired in a reduction in force:

When a discharge results from a work force reduction, an employee is not replaced, instead his position is eliminated. Barnes v. GenCorp Inc. (C.A.6, 1990), 896 F.2d 1457, 1465. Logically, then, a plaintiff discharged as part of a work force reduction cannot offer evidence that he was replaced by a substantially younger person to satisfy the fourth element of the prima facie case. Moreover, even if such a plaintiff demonstrates that his discharge permitted the retention of substantially younger persons, no inference of discriminatory intent can be drawn. Id. In the context of a work force reduction, the discharge of the plaintiff and retention of a substantially younger employee is not "inherently suspicious" because a work force reduction invariably entails the discharge of some older employees and the retention of some younger employees. Brocklehurst v. PPG Industries, Inc. (C.A.6, 1997), 123 F.3d 890, 896. Permitting an inference of intentional discrimination to arise from the retention of younger employees "would allow every person age 40-and-over to establish a prima facie case of age discrimination if he or she was discharged as part of a work force reduction." Barnes at 1465.

{¶57} Consequently, when a plaintiff's position is eliminated as part of a work force reduction, courts modify the fourth element of the prima facie case to require the plaintiff to " 'com[e] forward with additional evidence, be it direct, circumstantial, or statistical, to establish that age was a factor in the termination.' " Kundtz v. AT & T Solutions, Inc., 10th Dist. No. 05AP-1045, 2007-Ohio-1462, ¶21 . . . The purpose of this modified requirement is to ensure that, in work force reduction cases, the plaintiff has presented evidence to show that there is a chance that the work force reduction is not the reason for the termination. Asmo v. Keane, Inc. (C.A.6, 2006), 471 F.3d 588, 593 . . .

Nonetheless, the plaintiff can also show discrimination if he was in fact replaced instead his duties being eliminated, consolidated or distributed among a number of different people:

An employee is not eliminated as part of a work force reduction when he or she is replaced after his or her discharge. However, a person is not replaced when another employee is assigned to perform the plaintiff's duties in addition to other duties, or when the work is redistributed among other existing employees already performing related work. A person is replaced only when another employee is hired or reassigned to perform the plaintiff's duties.

In this case, the plaintiff’s 2004 promotion involved him assuming certain duties outside the public safety department. When his position was eliminated in 2006, those duties were reassigned and only his public safety duties were given to the 28-year old officer. The reassignment of his auxiliary duties were more than cosmetic or superficial duties. Thus, there was sufficient evidence to show that his position was eliminated and his duties distributed in a genuine reduction in force. Therefore, without additional evidence or direct evidence of age discrimination, summary judgment on this claim was affirmed.

Promissory Estoppel.

Plaintiff brought this claim based on the three separate promises of job security which he received both before and after he was hired by Capital. As explained by the Court:

Promissory estoppel provides an equitable remedy for a breach of an oral promise, absent a signed agreement. Olympic Holding Co. v. ACE Ltd., 122 Ohio.St.3d 89, 2009-Ohio-2057, ¶40. In order to succeed on a claim for promissory estoppel: "The party claiming the estoppel must have relied on conduct of an adversary in such a manner as to change his position for the worse and that reliance must have been reasonable in that the party claiming estoppel did not know and could not have known that its adversary's conduct was misleading." . . . The elements necessary to prove a claim for promissory estoppel are: (1) a clear, unambiguous promise, (2) the person to whom the promise is made relies on the promise, (3) reliance on the promise is reasonable and foreseeable, and (4) the person claiming reliance is injured as a result of reliance on the promise.

The fatal flaw in his argument, however, is that he signed written contracts which promised him only employment for a year at a time. Therefore, his reliance on the oral promises was not reasonable under the circumstances:

[C]ourts cannot enforce an oral promise in preference to a signed writing that pertains to exactly the same subject matter, but has different terms. Ed Schory & Sons at 440. Thus, "[p]romissory estoppel does not apply to oral statements made prior to the written contract, where the contract covers the same subject matter.

The Court rejected the plaintiff’s argument that his employment letters were not binding contracts, but only acknowledgment of certain terms. The Court also rejected the argument that the plaintiff’s reliance on promises made during the budget crises were reasonable under the circumstances. In any event, the plaintiff did not provide any evidence that he relied on the promises to his detriment since there was not evidence that he rejected a job offer in reliance on the promises. On the contrary, despite the promises being made to him during the budget crises, he promptly began searching for another job and submitting his resume to other employers.

Insomniacs can read the full opinion at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-5672.pdf.

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 change or be 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.