Age Discrimination in the Context of a Layoff

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Age discrimination in the workplace against employees at least 40 years old is forbidden by the Age Discrimination in Employment Act (ADEA) and the Massachusetts Fair Employment Practices Act (M.G.L. c. 151B). According to The Center on Aging & Work at Boston College, by 2019, 25% of the American workforce will be comprised of workers who are at least 55 years old. In addition, by 2019, the Urban Institute forecasts that workers 50 years old and older will make up 35% of the United States labor force. Given the inherent bias against older workers, it stands to reason that age discrimination claims will increase as the average age of the workforce rises. In the three year period from 2011 through 2013, for example, age discrimination complaints filed with the Massachusetts Commission Against Discrimination averaged approximately 405 cases per year. In contrast, in the three year period from 2014 through 2016, age discrimination complaints averaged approximately 550 filings per year -- an increase of approximately 35%.

Age discrimination cases in the context of a reduction-in-force ("RIF") present unique challenges. Like most discrimination claims, age bias is often proven through circumstantial or indirect evidence. Under the McDonnell-Douglas burden-shifting framework, for example, an employee who brings a discrimination claim relying on circumstantial evidence must first satisfy the elements of a prima facie case. After doing so, the burden of production shifts to the employer to provide a legitimate, non-discriminatory reason for the adverse employment action in question. In the third stage, the employee may ultimately prevail by furnishing evidence that the company's facially proper reasons were not the real reasons for the termination or other negative treatment. As clarified by the Massachusetts Supreme Judicial Court (SJC) in Verdrager v. Mintz Levin (which we discussed here), a finding of discrimination can still be returned "even if that evidence does not show directly that the true reasons were, in fact, discriminatory." Notably, this is consistent with the Supreme Court precedent in St. Mary's Honor Center v. Hicks, holding that "[t]he factfinder's disbelief of the reasons put forward by the defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may, together with the elements of the prima facie case, suffice to show intentional discrimination."

In Sullivan v. Liberty Mutual Insurance, the SJC observed that an employee's initial burden in establishing a prima facie case "is not onerous," which is consistent with a long-line of federal court cases interpreting the ADEA. In Che v. MBTA, for example, the First Circuit underscored that satisfying the prima facie elements is "a small showing that is not onerous and is easily made." Above all, the Sullivan decision was the SJC's first opportunity to address the nuances of establishing a prima facie case in the context of a RIF. In doing so, the Court noted the typical elements at the first stage of the burden-shifting framework:

  1. Membership within a protected class
  2. Job performance at an acceptable level
  3. Termination or some other form of an adverse employment action
  4. The employer sought to fill her position by hiring another individual with qualifications similar to herself

Normally, as articulated in Knight v. Avon Products, an age discrimination victim fulfills the final prong of the prima facie case by demonstrating an age disparity of five years or more between him or herself and the younger replacement. Addressing the final prong, the SJC opined that "the fourth element is nonsensical in a reduction in force case: the plaintiff is not replaced, nor does her employer 'seek to fill' the position, for the very purpose of a workforce reorganization is generally to reduce the number of employees." Given the many different circumstances that a RIF can present, the Court reasoned that the final prong "cannot be precise," making clear that "a plaintiff in a reduction in force case may satisfy the fourth element of her prima facie case by producing some evidence that her layoff occurred in circumstances that would raise a reasonable inference of unlawful discrimination."

Turning to the specific facts presented in Sullivan, the Court held that the plaintiff established a prima facie case. Significantly, the SJC focused on the fourth element and noted that the employer had retained less successful employees in the same position as plaintiff and that the large majority of those selected for layoff were over forty years old. Ultimately, however, the SJC affirmed the Superior Court's grant of summary judgment in favor of the employer, thus dismissing the case before Sullivan had the opportunity to present her claims to a jury.

As further background, Sullivan worked as an attorney for Liberty Mutual's Boston office at the time of her layoff and thereafter brought claims for both age and gender discrimination. Overall, the company laid off a total of six attorneys, three of whom were women. Sullivan was 49 years old at the time of her discharge and Liberty Mutual transferred her cases to six other attorneys, five of whom were men and all of whom were substantially younger than Sullivan. Prior to the RIF and in an effort to help determine who should be selected for lay off, Liberty Mutual closely evaluated Sullivan and numerous other employees across a wide range of factors -- including job responsibilities, experience, interpersonal communication, and legal ability. Approximately six months later, Sullivan was terminated. Of particular importance, the company justified the decision to lay off Sullivan by characterizing her legal ability as "sporadic," taking issue with her organizational skills and attention to cases, and alleging that she had "poor human relations skills."

Significantly, the character of these criticisms largely coincided with the factors that Liberty Mutual utilized to formally evaluate Sullivan's performance months prior. Accordingly, one might reasonably expect Liberty Mutual's decision to lay off Sullivan to be grounded in the the results of her performance review. As the SJC acknowledged, however, Liberty Mutual "retained in its Boston office male attorneys with the same job classification as Sullivan, who had been rated lower than she had in the last performance evaluation conducted before the reduction in force." As justification for retaining one particular lower-rated and younger male colleague, the company pointed to his "affable, straightforward nature." Although a unanimous decision, the Sullivan case was a close call that could have gone either way. By way of analogy to similar cases decided both before and after the Sullivan decision, inferences for unlawful motive can be drawn in several ways. As examples:

First, although the company pointed to specific problems that it perceived with Sullivan's performance, her history of successful performance casts doubt on the gravity of such concerns. Indeed, during her twelve year tenure with Liberty Mutual, Sullivan consistently received "generally positive" evaluations that never fell below an overall rating of "meets expectations." In Bulwer v. Mount Auburn Hospital (which we discussed here), the SJC reversed summary judgment in the employer's favor, noting that an inference of discrimination could be drawn because "while the record plainly contains negative evaluations ... the record also contains numerous evaluations inconsistent with those criticisms." As in Bulwer, Sullivan's track record of positive evaluations could be viewed as inconsistent with the reasons for her termination, thus allowing a jury or fact finder to find Liberty's Mutual justification was merely a pretext for age discrimination. In fact, in Cutcher v. Kmart, the Sixth Circuit denied summary judgment in a medical leave discrimination case where the employee had actually received a lower RIF appraisal score than many of her colleagues. There, the court found that pretext could be inferred based on, among other pieces of evidence, the lack of documentation to corroborate the employee's lower RIF appraisal scores, her documented favorable work history, and the discrepancy between her prior annual reviews and her RIF appraisal.

Second, in the months leading up to the RIF, Sullivan achieved an overall rating that was higher than three male colleagues who were not laid off. Notably, the company conducted this particular review as a way to help determine which employees should be selected or retained as part of the upcoming RIF. In City of Salem v. MCAD, the SJC observed that weaknesses and implausibilities in an employer's actions can support a jury’s conclusion that such "reasons" are a pretext for discrimination. As applied to the facts here, Liberty Mutual's decision to look past the relative scores of Sullivan and her younger, male colleagues is a remarkable inconsistency that would allow a jury to infer discriminatory animus. Indeed, the company went to great lengths to evaluate employees in preparation for the upcoming RIF only to selectively disregard the results in terminating Sullivan.

Third, as stated in Matthews v. Ocean Spray Cranberries, it is well-established that differences in treatment based on protected category (including age and gender) constitute powerful evidence of discriminatory animus. Here, in the face of Sullivan's higher appraisal score, Liberty Mutual sought to defend its decision to retain one particular male colleague based on his "affable, straightforward nature." As noted above, however, interpersonal communication was among the categories evaluated as part of the appraisal. Evidently, this particular attorney's interpersonal skills were not strong enough to make up for presumed deficiencies in other categories -- indeed, if that were the case, Sullivan's score would have been lower. The company's willingness to look past this particular attorney's deficiencies vis-a-vis Sullivan and focus on his apparent strengths -- thus essentially rewriting the appraisal's weighting system -- rings of disparate treatment.

Overall, as acknowledged in Matthews v. Allis-Chalmers, there is a psychological phenomenon inherent in RIF cases that lends courts to give employers the benefit of the doubt:

Unlike the employer who passes over a qualified minority applicant, the employer who fires a qualified older employee as part of a reduction-in-force does nothing inherently suspicious. One expects nondiscriminating employers to hire qualified applicants rather than keep looking. To do otherwise raises a fair inference of discrimination. In the reduction-in-force case, the employer often must discharge qualified employees. The nondiscriminating employer will choose whom to discharge on the basis of their relative contributions to the business. That the one chosen happens to be older by itself raises no fair inference of discrimination -- those who remain may be more productive. The age discrimination plaintiff in this type of case must show more.

For this reason, the need to highlight the summary judgment standard and clearly articulate the evidence that supports the drawing of reasonable inferences for discrimination is especially acute in RIF cases. For more information on the various ways in which pretext may be inferred, please visit Inferring Pretext in Employment Discrimination Cases: A Baker’s Dozen.

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